Xiaomi’s first electric sedan has done what no Chinese brand had managed before in the country’s premium EV segment, overtaking Tesla’s Model 3 in annual sales. In 2025, the Xiaomi SU7 became the top-selling premium electric sedan in China, a symbolic passing of the torch in a market that has long treated Tesla as the benchmark. The shift is not just about one model edging out another, it signals a deeper realignment of power in the world’s most important electric vehicle arena.
How Xiaomi’s rookie EV toppled a segment leader
The scale of Xiaomi’s breakthrough is striking for a company that only recently entered carmaking. Data from the China Passenger Car Association shows that sales of the Xiaomi SU7 reached 258,164 units in 2025, nearly 30 percent higher than its American rival in the same segment. That figure makes the SU7 not only the first Chinese premium EV to outsell the Tesla Model 3 in a full year, but also a volume player on par with established mass-market sedans, including petrol powered rivals, in China’s broader passenger car landscape.
Multiple reports underline that Xiaomi sold more units of its SU7 electric sedan than Tesla’s Model 3 in China last year, with 258,164 deliveries that were about 30 percent higher than the Model 3. In other words, the SU7 did not just squeak past Tesla, it opened a meaningful gap in a segment that had been dominated by the American brand since it localized production. For a company better known for smartphones and gadgets, that kind of first-year performance instantly changes how global automakers view Chinese tech groups as competitors.
From “Tesla killer” rhetoric to measurable reality
For years, Chinese brands have been described as would-be “Tesla killers,” but the label rarely matched the numbers. Reports now describe how, after five years of playing catch up, China has finally produced a premium EV that can credibly claim that mantle, with Xiaomi’s SU7 outselling the Model 3 in its home market. Another account notes that Xiaomi’s SU7 outsells Tesla’s Model 3 in China for the first time in 2025, stressing that, After years of trying to compete with Tesla’s dominance, a domestic brand has finally broken through in the sedan segment.
Industry commentary frames this as one of the most important developments in the Chinese auto industry, with Xiaomi’s SU7 having outsold Tesla’s Model 3 in 2025 and breaking what some analysts saw as a psychological volume record. The Xiaomi SU7, built by a company best known for phones, has overtaken Tesla’s Model 3 in China, signaling rising local rivals, as one report on The Xiaomi SU7 puts it. The shift turns years of hype about a “Tesla killer” into something quantifiable, and it does so in the one market where Tesla had built both scale and brand prestige.
What made the SU7 so compelling to Chinese buyers
To understand why the SU7 resonated, it helps to look at how Xiaomi positioned the car. The company leaned heavily on its existing ecosystem of devices and services, pitching the SU7 as an extension of the Xiaomi SU7 brand that many Chinese consumers already carry in their pockets. Reports highlight that the sedan is built by a company best known for phones, and that familiarity likely helped shorten the trust gap that new automakers usually face. Xiaomi also emphasized software integration, in car connectivity, and a user interface that mirrors its smartphones, giving tech savvy buyers a sense that they were buying into a unified digital experience rather than a standalone vehicle.
Performance and range also mattered in a market where Tesla had set expectations. Coverage of the SU7’s launch notes that the car was benchmarked directly against the Tesla Model 3, with Xiaomi aiming to match or exceed key specs while undercutting on price. One analysis points out that the SU7’s claimed range is competitive with the Model 3’s 606 km figure cited for certain trims, a detail referenced in reporting on Model 3 performance. Combined with aggressive financing, software centric marketing, and Xiaomi’s reputation for value in consumer electronics, the package gave buyers a credible alternative that felt both aspirational and attainable.
Tesla’s China challenge and the premium EV shake up
For Tesla, the SU7’s surge is a warning shot in what has been its most strategically important overseas market. Reports on the Chinese EV sector note that the Xiaomi SU7 has overtaken Tesla Model 3 as China’s top premium EV, even as other domestic brands like BYD, Nio, and Xpeng intensify competition in adjacent segments. While Tesla still dominates the SUV segment according to the same set of reports, losing the sedan crown to a first time automaker underscores how quickly the competitive field is shifting.
Industry data also shows that the SU7’s success is not a one off anomaly but part of a broader pattern of local brands eroding Tesla’s share. One detailed study of the premium EV segment in China notes that Data from the China Passenger Car Association confirms Xiaomi’s lead over the Model 3 and highlights how domestic EVs are now competing head to head with petrol powered sedans on volume. Another report summarizing the 2025 sales race notes that Xiaomi sold more units of its SU7 than Tesla’s Model 3 in China, even as Tesla maintained strength in other body styles. The net effect is a premium EV market that looks far less like a one brand show and far more like a crowded, fast moving tech sector.
What Xiaomi’s win signals for China’s auto ambitions
Xiaomi’s victory over the Model 3 is about more than bragging rights, it is a proof point for China’s broader industrial strategy. Commentators describe the SU7 as China’s first true “Tesla killer,” a massive achievement for the country’s premium EV makers after years of state support for battery technology, charging networks, and local champions. Another analysis notes that Xiaomi’s SU7 outsells Tesla’s Model 3 in China for the first time in 2025, and that, China for the first time has a homegrown sedan that can beat Tesla on its own turf in a full year of sales.
The company’s leadership is already signaling that it sees this as a starting point rather than a peak. Key Takeaways from one detailed report note that Xiaomi’s first EV, the SU7, outsold the Tesla Model 3 in China in 2025 and that Xiaomi founding Chairman Lei Jun says Tesla has never before been beaten by a Chinese brand in this segment. That same report underscores how Lei Jun expects Xiaomi to top Tesla in China sales over time, not just in a single model comparison. For policymakers in Beijing, the SU7’s performance validates years of support for EVs as a strategic industry, while for global automakers it is a reminder that the next wave of competition may come as easily from a smartphone icon as from a traditional car company.
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