Tesla Inc (NASDAQ:TSLA) just got good news in Europe with a sales rebound in the region for the month of February. Although suffering from declining demand in many parts of the world in 2025, Tesla may face bad news from its key Chinese market, thanks to new models from competitors.



<h2>Tesla Rivals See Strong Demand in China</h2>



After posting a year-over-year sales decline in China in 2025, things might not be optimistic for 2026.



New premium electric vehicles recently launched in China are seeing strong pre-order numbers and likely taking market share from existing Tesla models in the country.



The updated Xiaomi SU7 model from Xiaomi (OTC:XIACF)(OTC:XIACY) began pre-sales on March 19 and hit 15,000 orders in 34 minutes, according to a report from Electrek.



The updated Xiaomi SU7 starts at $33,400, which is around $580 more expensive than the prior SU7 model. But, the updated SU7 still comes with a starting price lower than the Tesla Model 3, which starts at around $34,200 in China.



A new joint venture from Chinese companies SAIC and Huawei, called Shangjie, also launched new premium EV models in China recently.



The Z7 and Z7T come with base prices starting at $33,300 and $34,800, respectively, cheaper than the updated SU7 and the Model 3.



These two models landed 18,000 pre-sales three hours after launching orders, as reported by ChinaEVHome.



<h2>Why It's Bad News for Tesla</h2>



Electrek reports that the SU7 is China's best-selling EV above the 200,000 yuan price point in China. The vehicle was the fifth-best-selling EV in China in 2025, with 258,164 units sold. The Model 3 ranked sixth at around 200,000 units sold.



China remains the world's largest EV market with more than 7.87 million units sold in 2025, up 24.4% year-over-year.



Unlike other regions where Tesla has dominated, the Chinese EV market continues to be dominated by domestic automakers.



Recall that last year Xiaomi's launch of the YU7 was so well received that wait times were hitting 50+ weeks for the model for consumers and the CEO was recommending that customers consider buying vehicles from rivals if they wanted to get new cars quicker.



Xiaomi is best known for its smartphones and is often referred to as the &#34;Apple of China.&#34;



The success of Xiaomi’s YU7 and SU7 has intensified the competition Tesla faces in China and lowered price points for consumers seeking vehicles with metrics similar to the Model 3 and Model Y.



Image via Shutterstock

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XIACY

Tesla faces increasing competition in China as new premium electric vehicles (EVs) gain strong demand. The updated Xiaomi SU7 model received 15,000 pre-orders in just 34 minutes, while a joint venture from SAIC and Huawei's new models also saw significant pre-sales. This trend follows a year-over-year sales decline for Tesla in China, with domestic automakers dominating the market. The Xiaomi SU7 is now the best-selling EV above the 200,000 yuan price point, intensifying pressure on Tesla's Model 3 and Model Y.

- Tesla Inc experienced a sales rebound in Europe for February despite declining demand globally in 2025 and facing competition in China.  
- New premium electric vehicles, like the updated Xiaomi SU7 and models from the SAIC-Huawei joint venture, are capturing market share in China with strong pre-order numbers.  
- As a result, Tesla's Model 3 sales are threatened, as competition intensifies in the world's largest EV market, which saw over 7.87 million units sold in 2025.

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Tesla China Demand Faces More Pressure: New Rival Premium EV Hits 15,000 Orders In 34 Minutes