Tesla Faces "Model Y Killer" Wave in China, Analysts Say.

Tesla faces stiff competition in China as local rivals launch "Model Y killer" cars to take down the best-selling EV. Xiaomi's YU7 received over 240,000 pre-orders in 24 hours, while Xpeng's G7 and Nio's L90 are set to join the market. Analysts say Tesla is falling behind high-tech new models, with sales of the Model Y flat since 2022.

Tesla's dominance in the Chinese electric vehicle (EV) market is facing significant challenges as local rivals launch new models designed to compete with the best-selling Model Y. Xiaomi's YU7 has received over 240,000 pre-orders in just 24 hours, while Xpeng's G7 and Nio's L90 are set to join the market, aiming to capture a significant share of the premium crossover segment.

According to data from the China Passenger Car Association (CPCA), Tesla delivered 71,599 vehicles in China last month, of which 44,848 were retail sales of the Model Y [1]. This represents a 9.1% year-over-year increase in Model Y sales, ending a two-month consecutive decline. However, the overall market for new energy vehicles (NEVs) in China is growing rapidly, with June's NEV retail sales totaling 1.11 million units, up 29.7% year-over-year and 8.2% month-on-month [3].

Xiaomi's YU7, priced at 195,800 yuan ($27,325 USD) for the base model, has already generated substantial interest with over 240,000 pre-orders within 24 hours of its launch [2]. The YU7 competes directly with the Tesla Model Y, which starts at 263,500 yuan ($36,770 USD) and ranges up to 313,500 yuan ($43,750 USD) [2]. Xpeng's G7, priced at 195,800 yuan ($27,325 USD) for the base model, offers a similar range and performance, with a 292 horsepower electric motor and a 0-100 km/h acceleration time of 6.5 seconds [2]. The G7 also supports advanced features such as Vehicle-to-Load (V2L) functionality and a 15.6-inch central touchscreen powered by Qualcomm's Snapdragon 8295 chipset.

Nio's L90, another competitor to the Model Y, is expected to launch later this month. Nio has been a strong performer in the premium EV segment in China, and the L90 is anticipated to further bolster its position in the market.

Analysts suggest that Tesla's Model Y sales have been flat since 2022, and the company is facing increased competition from high-tech new models launched by local rivals. Tesla's market share in China's NEV market in June was 5.53%, down from 6.92% in the same period last year, though higher than May's 3.78% [3]. The company's shares fell 6.8% on Monday as CEO Elon Musk and Donald Trump entered a new argument over Musk’s intentions to create a new political party in the United States [1]. However, the shares closed 1.3% higher at $297.81 on Tuesday, and year to date, the stock has lost 26.3% of its value [1].

Tesla will report its second quarter financial results on June 23, and investors will be closely watching the company's ability to maintain its market share in the face of stiff competition from local rivals.

References:
[1] https://eletric-vehicles.com/tesla/tesla-model-y-tops-june-sales-in-china-becomes-best-selling-model/
[2] https://electrek.co/2025/07/03/xpeng-g7-tesla-model-y-competitor/?extended-comments=1
[3] https://cnevpost.com/2025/07/08/tesla-jun-2025-retail-sales-china/