Tesla-led billionaire Elon Musk has been dethroned in China by Xiaomi’s electric car venture, at least in January 2026, CNBC reported.
Xiaomi’s YU7 SUV took over the top spot in China in terms of sales in January, with the company selling 37,869 units compared to 16,845 Tesla Model Y vehicles, the report showed, citing data from the China Automobile Association.
Is Tesla losing face in China?
The electric vehicle (EV) company’s Model Y was the best-selling model in December 2025; however, it fell to 20th place a month later. In the same period, it also fell from first to seventh position among new energy cars.
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The figures, released by car sales platform Autohome on Thursday (local time), included figures for both electric and petrol-powered vehicles.
Xiaomi started selling its YU7, its second electric car, almost half a year ago, in the summer of 2025.
Xiaomi aims to take on Tesla
The Chinese company known for its smartphones, which entered the electric car market segment in March 2024, has openly expressed its plan to take over Tesla. In China, Xiaomi priced its car 10,000 yuan ($1,450) less than the Tesla Model Y. The firm also said its model outperformed the Tesla Model Y in several key metrics, including range per battery charge.
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Tesla performance in China
According to the report, in 2025, analysts predicted that Xiaomi’s YU7 would take market share from Tesla’s Model Y, which was the company’s best-selling car in China. The Model Y topped the monthly sales chart in China in December, ahead of BYD’s Qin Plus, while Xiaomi’s YU7 came in third.
Monthly sales figures may fluctuate. While the YU7 sold more units than the Model Y in October 2025, it still didn’t emerge as the overall monthly leader.
Looking only at new energy vehicles, Tesla finished in fifth place in China last year and Xiaomi in tenth place. Across the broader auto market in 2025, BYD remained the top seller with more than three million vehicles delivered, followed by Geely with around 2.6 million, according to data from the China Automobile Association.
Tesla sales are faltering worldwide
According to a report in The Wall Street Journal, Tesla ended 2025 with significantly lower sales in Europe, while China’s BYD overtook it.
Read also | Tesla loses lead as China’s BYD surpasses EV sales in Germany and UK
New car registrations, a measure of sales, fell 20% year-on-year to 35,280 units in December 2025 across the European Union, including the United Kingdom, Iceland, Liechtenstein, Norway and Switzerland, according to the European Automobile Manufacturers Association. On a year-over-year basis, Tesla’s sales fell 27% to 238,656 units. By contrast, new registrations for BYD more than tripled to 27,678 units in December and 187,657 in 2025.
Globally, Tesla’s sales were down 9% in 2025 and 16% in the fourth quarter compared to the previous year. The company has lost its crown as the world’s leading EV maker to BYD.
Tesla is failing to gain ground in India
The Musk-led company had a similar story in India, where it entered in July 2025 and failed to gain traction. A Bloomberg report published in January said the company was facing difficulties selling even about one-third of the vehicles it brought into the country. This comes after several buyers who initially showed interest and made early bookings backed out. The report suggested that Indian buyers have yet to fully embrace the brand, due to its limited visibility and higher price.
By 2025, Tesla had only registered 227 cars in India, and buyers who had previously put down initial deposits were reluctant to complete the purchase.
Whether Tesla will see a global demand recovery in 2026 remains to be seen.