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Billionaire Elon Musk-led Tesla has been dethroned in China by Xiaomi's electric car venture, at least in January 2026, CNBC reported.
The Xiaomi YU7 SUV has taken over the top spot in China in terms of sales in January, with the company selling 37,869 units, as compared to Tesla's 16,845 Model Y vehicles, the report showed, citing data from the China Passenger Car Association.
Tesla loses face in China?
The electric vehicle (EV) company's Model Y was the best-selling model in December 2025; however, it plunged to the 20th spot just a month later. Over the same period, it also fell from first to seventh position among the new energy vehicles.
The data, published on Thursday (local time) by car sales platform Autohome, included figures from both electric and gasoline-powered vehicles.
Xiaomi started the sale of its YU7, its second electric car, nearly half a year ago, in the summer of 2025.
Xiaomi aims to take over Tesla
Known for its smartphones, the Chinese company that forayed into the electric car market segment in March 2024 has openly expressed its plan to take on Tesla. In China, Xiaomi priced its car at 10,000 yuan ($1,450) less than Tesla’s Model Y. The firm also said its model outperformed Tesla's Model Y on several key measures, including driving range on a single battery charge.
Tesla's China performance
According to the report, analysts in 2025 predicted that Xiaomi's YU7 model would capture the market share from Tesla's Model Y, which was the company's best-selling car in China. Model Y topped the monthly sales chart in China in December and was ahead of BYD's Qin Plus, while Xiaomi's YU7 came in third.
Monthly sales data can fluctuate. While the YU7 sold more units than the Model Y in October 2025, it still did not emerge as the overall monthly leader.
Looking only at new-energy vehicles, Tesla finished fifth in China’s sales rankings last year, with Xiaomi ranked tenth. Across the broader auto market in 2025, BYD remained the top seller, with more than three million vehicles delivered, followed by Geely at about 2.6 million, based on figures from the China Passenger Car Association.
Tesla sales falter globally
According to a report in The Wall Street Journal, Tesla ended 2025 with significantly lower sales in Europe, while China's BYD outpaced it.
New car registrations, an indicator of sales, declined 20% on year to 35,280 units in December 2025 across the European Union, including the U.K., Iceland, Liechtenstein, Norway, and Switzerland, according to the European Automobile Manufacturers’ Association. On an annual basis, Tesla's sales declined 27% to 238,656 units. In contrast, new registrations for BYD more than tripled to 27,678 units in December and to 187,657 for 2025.
Globally, Tesla's sales declined 9% in 2025 and 16% in the fourth quarter compared to a year ago. The company lost its crown as the world's leading EV maker to BYD.
Tesla fails to make a mark in India
Musk-led company had a similar story to tell in India, where it entered in July 2025 and has failed to make a mark. A Bloomberg report published in January said the company faced difficulties selling even around one-third of the vehicles it brought into the country. This was after several buyers who initially expressed interest and made early bookings backed out. The report suggested Indian buyers have yet to accept the brand completely, owing to its limited visibility and higher price.
In 2025, Tesla registered only 227 cars in India, and buyers who had previously made initial deposits were reluctant to complete the purchase.
Whether Tesla sees a global recovery in demand in 2026 remains to be seen.
English (US) ·