In a significant shift in China's electric vehicle market, Xiaomi's SU7 surpassed Tesla's Model 3 in sales for 2025, delivering 258,164 units compared to Tesla's 200,361. This marks the first time since Tesla's 2019 entry into China that another brand has overtaken it in the premium sedan segment. The development highlights intensifying competition, prompting Tesla to launch an insurance subsidy for the Model 3.
The China Passenger Car Association reported that Xiaomi, known for its smartphones, achieved a breakthrough with its first electric vehicle, the SU7, in 2025. The company delivered 258,164 units, outpacing Tesla's Model 3, which sold 200,361 vehicles. This is the first instance since the Model 3's launch in China in 2019 that a rival has claimed the top spot in the premium electric sedan category, despite previous challenges from local startups with aggressive pricing and features.
Several factors contributed to Xiaomi's success. The SU7's baseline variant is priced at CNY 215,900, undercutting the Model 3's CNY 235,500 by about 9%. It also offers a superior 700 km CLTC range compared to the Model 3's 606 km. Additional appeals include integration with Xiaomi's HyperOS, free driver-assistance features, ties to its smartphone ecosystem, and the ability to scale production quickly to meet demand. The SU7 debuted in China in April 2024, rapidly gaining traction among buyers.
For Tesla, the results signal a need to adapt in its largest market. On Saturday, January 25, 2026, Tesla China introduced a limited-time promotion for the Model 3, providing an 8,000 yuan ($1,150) insurance subsidy. This move comes as rivals match Tesla's low-interest incentives, underscoring the escalating battle for dominance in the world's biggest EV market. Xiaomi's achievement bolsters Chinese automakers, demonstrating their ability to compete on quality and scale beyond just price.
