After years of trying to compete with Tesla’s dominance, a Chinese technology company has managed to outsell the American electric vehicle giant in the premium sedan category, marking a significant milestone for the country’s automotive industry.
Xiaomi sold 258,164 units of its SU7 electric sedan across China last year, beating Tesla’s Model 3, which delivered 200,361 vehicles during the same period, based on figures from the China Passenger Car Association.
This marks the first time Tesla’s Model 3 has lost its top position in China’s premium electric sedan market since the vehicle started selling in the country at the close of 2019.
Chinese competitors challenge Tesla’s market dominance
Tesla builds its Model 3 at its Shanghai manufacturing plant located in the Lingang free-trade zone. The vehicle had maintained its leading position in the premium electric sedan segment through 2024, even as several Chinese competitors like Nio, Xpeng, and IM Motors worked hard to challenge its market share.
“Tesla’s dominance in the premium EV segment has been eroded by its Chinese competitors that are able to churn out vehicles on par with its technology standards while offering them at lower prices,” said Eric Han, a senior manager at Shanghai consultancy Suolei. “Xiaomi’s success is a strong boost for Chinese carmakers, which are all trying to move up the value chain.”
Tesla’s Shanghai facility also produces the Model Y sport utility vehicle, which managed to outsell all other SUVs on the mainland in 2025, including those running on gasoline.
Upgraded SU7 draws strong pre-orders
Following last year’s strong performance, Xiaomi has moved forward with an improved version of the SU7 sedan. The company started taking small deposits for the updated model on January 7, 2026, and received close to 100,000 advance orders within just 15 days. The new version carries a pre-sale price of 229,900 yuan ($32,500), which represents an increase of 14,000 yuan ($1,980) compared to the earlier model.
The updated SU7 is scheduled for its official release in April 2026, though marketing activities began three months ahead of time, according to CLS. Workers at several Xiaomi retail locations in Beijing reported receiving between 200 and 400 orders per store.
Outlets in Shanghai and Wuhan have also recorded more than 100 orders each. With 477 stores operating nationwide, Xiaomi calculates that advance orders are approaching 100,000 units.
The newer SU7 comes with better driving assistance features and longer battery capacity. Technical improvements include a silicon carbide high-voltage platform rated at 752V and 897V, laser radar equipment standard on all versions, 700 TOPS of computing power for self-driving capabilities, and a CLTC-rated driving range of 902 kilometers.
Xiaomi CEO Lei Jun hosted three live-streaming events in January 2026 to promote the advance ordering period.
The firm began selling off the leftover inventory of the previous year’s model in January 2026 as pre-sales for the revised SU7 got underway. Dealers have ceased accepting orders for specific setups and are now selling these older units from their current inventory.
In an effort to ensure a seamless transition between model years and consistent supply chain operation, Xiaomi has changed production priorities to produce more SU7 cars while allocating capacity for the next generation model.
Earlier, Xiaomi experienced problems with delivery timelines, especially with the Xiaomi YU7, where customers at one point waited more than a year for their vehicles. To prevent similar delays, the company introduced an early small-deposit approach for the SU7.
Sales staff explained that advance orders help the company study demand patterns and handle supply chain stocks, including essential parts, to reduce long waiting periods for buyers.
With 411,800 automobiles delivered overall in 2025, Xiaomi exceeded its annual target by 17%. The business has set a goal of 550,000 deliveries for 2026 and intends to launch two more models: an unannounced YU7 GT and the pre-ordered SU7.
Talk about a possible range-extender version has not been confirmed. Since first launching in April 2024, the Xiaomi SU7 has sold close to 400,000 units and remains central to the company’s delivery plans as it moves into 2026.
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