Xiaomi launched a car just slightly cheaper than Tesla’s Model Y, and it has already attracted hundreds of thousands of buyers.
In a Weibo post on Thursday, the Chinese smartphone and electric vehicle maker said it received over 200,000 orders for the YU7 car within three minutes of its launch in Beijing.
Within an hour of the sale starting, it had more than 289,000 orders for the car, Xiaomi wrote in a second Weibo post.
The car, which retails starting at $35,000, intends to compete with the Model Y, China’s most popular SUV, which retails starting at $36,760.
Xiaomi’s founder and CEO, Lei Jun, repeatedly took jabs at Tesla during the launch event.
“Tesla previously said, ‘Go ahead and compare,’ and we at Xiaomi just won’t accept defeat. Today we officially take up Tesla’s invite to compare,” Lei said on Thursday.
Tesla and CEO Elon Musk did not immediately respond to a request for comment from Business Insider.
Xiaomi’s stock rose 8% to a record high on Friday in Hong Kong following strong order demand. It has since pared gains and is trading 2.6% up at 59.60 Hong Kong dollars.
“YU7 seems to be selling like hot cakes despite slightly higher pricing” than estimated, Jefferies analysts led by Edison Lee wrote in a note on Thursday.
“YU7’s pricing is slightly below that of Tesla Model Y, but it offers much better specs/performance,” the analysts wrote. “Model Y is the main target of YU7, and thus we expect YU7 would be able to take market share from Model Y.”
EV price wars
Chinese players, including Xiaomi, BYD, the world’s largest EV company by sales volume, Nio, and Xpeng, have been undercutting Tesla’s prices and gaining market share in China and Europe.
The YU7 unveiling adds to the growing EV price war — and Tesla’s headaches in the Chinese market.
The YU7 is Xiaomi’s second car since the company entered the EV sector last year with its SU7 sedan. The SU7 Sedan is priced below Tesla’s Model 3 and has sold more models than Tesla’s Model 3 in China every month since December.
It’s also attracting some big-name fans in the US.
In October, Ford’s CEO Jim Farley said he didn’t want to give up the Xiaomi SU7 he had been driving for the past half year.
Xiaomi’s stock is up 72% so far this year on the back of strong SU7 sales, continued success in the smartphone market, and the addition of home appliances to its product offering.
