In a stunning turn of events, Chinese tech titan Xiaomi received an astonishing 300,000 pre-orders within a mere hour for its inaugural sports utility vehicle (SUV), marking a pivotal moment in the automotive landscape.

Xiaomi's founder and CEO, Lei Jun, expressed his disbelief over the overwhelming response, stating, "In just two minutes, we were flooded with 196,000 paid pre-orders and 128,000 lock-in orders. We might just be witnessing a miracle in the automotive sector!" This electric vehicle frenzy followed the vehicle's grand unveiling on Thursday night.

According to Xiaomi's electric vehicle division, nearly 289,000 pre-orders were placed for the five-seater YU7 within that critical first hour, with the vehicle priced at approximately 253,500 yuan (around $35,000). This offers a competitive edge as it undercuts Tesla's popular Model Y by nearly 4%.

Market analysts suggest that Tesla, which has dominated the Chinese SUV market, will experience a further decline in sales as Xiaomi's innovative YU7 gains traction. The YU7 has already surpassed sales of Tesla's Model 3 in China consistently since December.

Experts at Jefferies noted, "The YU7 not only comes in at a slightly lower price than Tesla's Model Y but also delivers superior specifications and performance." This puts Tesla in a challenging position, with Citigroup analysts warning that the American automaker may need to reduce prices or offer more enticing incentives to remain competitive against Xiaomi's captivating offerings.

Tesla's market share in China has plummeted from a significant 15% in 2020 to just 7.6% in the early months of 2025, reflecting the harsh reality of an increasingly competitive EV landscape.

Following the pre-order surge, Xiaomi's stock skyrocketed by 8%, reaching new heights in Hong Kong. The company made its entry into car manufacturing with the SU7 model last year, aligning with a larger initiative to enhance domestic consumption amid China's push for growth.

However, enthusiasm is tempered by past incidents, such as the tragic crash of a Xiaomi SU7 in March, which claimed three lives while the vehicle was in assisted driving mode.

Amid this evolving market, Premier Li Qiang emphasized at the World Economic Forum in Tianjin China's ambition to emerge as a 'major consumption powerhouse' by boosting demand for high-value products like electric vehicles. As competition intensifies, all eyes will be on how the landscape shapes up in the coming months!