Tesla has another problem in China. This time it's a smartphone maker.
Tesla faces more electric vehicle competition in China as its sales growth stalls. It could really use a new model right about now.
Chinese consumer electronics maker Xiaomi launched its YU7 electric vehicle over the weekend. It's an impressive crossover-sized all-electric car targeting Tesla's best-selling Model Y.
'We expect Yu7 would significantly erode Tesla Model Y's China market share," wrote Citi analyst auto analyst Jeff Chung in a Sunday report. He projects Yu7 annual sales, after ramping up, at 300,000 to 360,000 'considering its outstanding tech features and value-for-money."
Tesla doesn't break out sales by model in China. It sold about 660,000 cars in China in 2024 and 1.8 million globally.
YU7 trims will be priced from about $35,000 to $45,000. The Model Y in China ranges from about $37,000 to $44,000. The Y standard per-charge range comes in at about 360 miles per charge, about 100 miles less than the YU7.
The timing of a new competitive launch isn't optimal for Tesla. Global sales fell 13% in the first quarter from a year ago, hurt by the Model Y update, which reduced production, and hurt by Elon Musk's political activities that Tesla characterized as brand challenges during its first-quarter earnings conference call.
Tesla's sales in China were roughly flat in the first quarter, but the U.S.-Chinese trade war hurt results in the second quarter, with Chinese new car buyers avoiding American products, according to Wall Street analysts. Through the first seven weeks of the Q2, Tesla sales were down about 25% from a year ago, according to registration data tracked by Chung.
Up until the second quarter, Tesla's market share of the Chinese battery-electric vehicle market has been relatively stable for the past few years, at just below 10%. That's been an impressive feat considering that Tesla doesn't have a lower-priced car that accounts for some 40% of the Chinese BEV market.
Market share, however, is starting to slip amid new competition. One thing that could help would be a new model. Tesla plans to launch a lower-priced vehicle in a matter of weeks, but investors haven't seen it yet. Future Fund Active ETF co-founder Gary Black worries that it will be a cheaper version of the Model 3 or Model Y. Lower priced versions of existing models could make it tougher to address the different segments of the Chinese car market.
None of that seems to bother investors, though; coming into the week of trading, Tesla stock was up 43% since the company's late-April earnings report. Investors aren't really thinking about car sales right now. They are focused on AI and self-driving cars.
Tesla plans to start a robotaxi service in Austin, Texas, in June. Investors believe that can unlock a new wave of growth for the auto maker.
Wedbush analyst Dan Ives called it the 'golden age of autonomous growth" in a Friday report. He raised his price target for Tesla stock to $500 from $350. He rates the shares a Buy.
Write to Al Root at allen.root@dowjones.com
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
an hour ago
- Time of India
Rare earth supply crunch: Over 21,000 jobs in India's audio electronics sector at risk due to China curbs, says Elcina report
More than 21,000 jobs in India's audio electronics sector are at risk due to China's curbs on the export of rare earth metals, industry body Elcina has said in a report shared with the government. In April, China implemented stricter licensing rules on the export of key rare earth elements like terbium and dysprosium, which are essential for making Neodymium-Iron-Boron (NdFeB) magnets — widely used in consumer electronics such as hearables, wearables, and speakers. The Electronics Industries Association of India (Elcina) said the move has disrupted supply chains globally and is severely affecting India's fast-growing wearables and hearables market, forcing many manufacturers to switch to importing fully assembled speaker modules from China, PTI reported. 'This creates a regressive trend — from component manufacturing back to finished good imports dependency. Over 5,000–6,000 direct jobs and 15,000 indirect jobs are at risk in speaker and audio component manufacturing, especially in Noida and South India,' Elcina noted. India dependent on China for NdFeB magnets Rare earth magnets make up 5–7% of the bill of materials, and India imports nearly 100% of its NdFeB magnet requirement, with China accounting for 90% of those imports. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Seniors Born 1939-1969 Receive 9 Benefits This Month Bettys Perks Learn More Undo Prices for Chinese magnets have surged amid tightened supply and administrative delays, while alternatives from Japan, the EU and the US are 2–3 times costlier and lack adequate capacity. Electronics manufacturer Videotex, which produces televisions for brands such as Havells (Lloyd), Reliance (BPL, Reconnect), Toshiba, and Vijay Sales, said the situation poses challenges, but the immediate impact on TV production is expected to be limited. 'Rare earth-based magnets are critical in TV manufacturing, particularly for speakers due to their compact size and high performance. However, we are working closely with our suppliers to ensure sufficient stock for the upcoming season,' said Arjun Bajaj, Director of Videotex. He added that Videotex is also exploring alternative magnet options like ferrite, which come with acceptable performance trade-offs, and stressed that this disruption highlights the need for long-term strategies to localise and diversify sourcing. Elcina urges government action Elcina has urged the government to begin government-to-government (G2G) talks with China, seek industry-specific exemptions, and boost domestic R&D and manufacturing under the electronics component manufacturing scheme. It also recommended that the government consider a production-linked incentive (PLI) scheme for critical minerals, to reduce India's reliance on China and ensure the resilience of its electronics supply chain. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
NDTV
an hour ago
- NDTV
China's New Military Weapon: Tiny Mosquito Drone Could Change Warfare Forever
Scientists in China have developed a really small, mosquito-sized drone for military operations, South China Morning Post (SCMP) reported. The micro drone has been developed by a robotics laboratory at the National University of Defence Technology (NUDT) in central China's Hunan province. Micro drones are small and compact drones that can be used for various applications besides military and defence. They have the potential to revolutionise various industries and applications with their unique capabilities. The prototype was displayed by researchers on air on CCTV 7 (China Central Television's military channel) on the weekend, the report noted. "Here in my hand is a mosquito-like type of robot. Miniature bionic robots like this one are especially suited to information reconnaissance and special missions on the battlefield," Liang Hexiang, a student at NUDT, told CCTV as he showed the small drone holding in his hand. The mosquito-sized drone reportedly had two small wings with leaflike structures on either side. It also had three hair-thin "legs". It was controlled with a smartphone and was roughly equivalent to a mosquito (about 1.3 centimetres long). Chinese military unveils mosquito-sized drones that can perform battlefield missions | Christopher McFadden, Interesting Engineering The drone features a pair of flapping 'wings' and 'legs' and is designed for covert military operations. China's National University of Defence… — Owen Gregorian (@OwenGregorian) June 22, 2025 The Chinese military unveils a tiny drone the size of a mosquito. The creators believe such a drone is nearly impossible to detect, making it ideal for reconnaissance. A compact handheld device is all that's needed for control. China is ahead of the rest of the world... — Alexeï (@jeanlol67573289) June 21, 2025 Use of micro-drones Such miniature drones can prove to be critical for covert military operations as they can be used for surveillance or reconnaissance missions without being easily detected. They can navigate through rubble or debris to locate survivors in emergencies. Microdrones can be equipped with sensors to monitor environmental conditions, such as air quality or water quality. Notably, microdrones come with a few challenges, such as they have limited payload capacity, which can restrict the types of sensors or equipment they can carry. They typically have shorter flight times due to their small batteries. However, improvements in battery life, sensor technology and artificial intelligence (AI) will continue to enhance the capabilities of microdrones.
Mint
3 hours ago
- Mint
Tesla's robotaxis are here: Everything you need to know
Tesla is rolling out its long-awaited robotaxi service in Austin, Texas, on Sunday, opening the electric-vehicle maker to the growing autonomous ride-hailing market, where its technology will be put to the test against market leader Waymo. Chief Executive Elon Musk has said the company will start small with up to 20 Tesla Model Ys driving on public roads, before expanding the service based on the technology's performance. There won't be a human driver behind the wheel. In an invitation shared on social media, Tesla said there would be a safety monitor sitting in the front-right passenger seat. Here is what to know about Tesla's robotaxi service. A robotaxi is a driverless, autonomous vehicle that operates like a taxicab or ride-hailing service. Several companies are testing or operating robotaxi services in the U.S., including Alphabet's Waymo and Zoox. Tesla's new robotaxi service employs Model Y electric SUVs piloted by an advanced version of Tesla's driver-assistance software, which it calls Full Self-Driving, or FSD. The Model Y is equipped with eight cameras that act as sensors for FSD. That is the same setup as the Model Y vehicles currently available for purchase. The version available to Tesla owners requires the driver to pay attention to the road and be prepared to take over plans to introduce two specially designed robotaxis to its service: a small, gold-colored sedan called the Cybercab, and a larger multiseater called the Robovan. Those vehicles have neither steering wheels nor pedals and could hit the road as soon as 2026. Tesla opened up its robotaxi service to a limited number of customers in Austin, where the company has its headquarters. The service is available within a geofenced area of Austin, where the company has been testing its vehicles. Musk has said the company is being cautious in how it rolls out this new technology. Before the launch, he warned that Tesla could change its plans. 'We are being super paranoid about safety," he wrote on X. Like Waymo and Zoox, Tesla will remotely monitor the performance of the vehicles and help them to navigate through difficult situations. Tesla has said the vehicles will be equipped with microphones to support their response to sirens from emergency vehicles. Musk has tied Tesla's fate to the performance of its robotics and artificial intelligence business. He forecasts that autonomous vehicles could add $5 trillion to $10 trillion to Tesla's market capitalization, which is currently around $1 trillion. Tesla's core business of manufacturing vehicles is under pressure and sales are declining as a result of increased competition and an aging vehicle lineup. Tesla also has faced a backlash from some owners and car buyers owing to Musk's work with the Trump administration. Last year, Tesla posted $98 billion in revenue, three-quarters of which came from car sales. Cathie Wood's ARK Invest projected that autonomous ride-hailing could be a $951 billion business for Tesla by 2029, at which point the service could make up around 90% of Tesla's earnings. Former Tesla President Jon McNeill, who is on the board of General Motors, said there is room for several autonomous-vehicle companies but questioned whether the robotaxi business is as large as Tesla and its supporters have projected. 'It's hard to square how people are arriving at a $1 trillion opportunity," he said. Some longtime investors are skeptical. The investor Gary Black recently said his Future Fund sold its remaining Tesla shares, citing the disconnect between its high market cap and declining vehicle sales. He doesn't think the robotaxi product will do much to boost the company's value. 'I don't see the upside at this point, but I see plenty of downside," he said. Industry leader Waymo said it makes more than 250,000 paid trips a week in San Francisco, Los Angeles, Phoenix and Austin. That business currently operates at a loss, but the company has said it sees a path to profitability. Zoox is available for use by its employees and invited guests in Las Vegas and the San Francisco Bay Area. It plans to launch in Austin and Miami and is also testing in Los Angeles, Seattle and Atlanta. Other companies have permits to test autonomous-vehicle technology, but most aren't able to offer rides to the public. Tesla has indicated it plans to expand services quickly to San Francisco, Los Angeles and San Antonio. By the end of 2026, Musk said he expects there to be hundreds of thousands of Teslas driving fully autonomously on roads in the U.S. Musk expects that many of those will be personally owned vehicles running Tesla's most-advanced version FSD software. He has compared his plans to a combination of the vacation-rental company Airbnb and Uber Technologies. Tesla faces some regulatory hurdles. Currently, autonomous vehicles are regulated at the state level and, in some cases, by cities. Musk has called for federal regulations, which would make it easier for the company to deploy its software on Teslas across the country. Write to Becky Peterson at
