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KIT NORTON

This Model Y Killer Is Getting Closer In The Rearview Mirror With Tesla Sales Already Under Pressure

Tesla rival Xiaomi is poised to release its "Model Y killer" earlier than expected, adding pressure to Tesla in the highly competitive Chinese EV market. Xiaomi stock rose Monday, but so did TSLA.

Xiaomi will release its YU7 crossover vehicle at the end of June, instead of the previously expected July release, Xiaomi Chief Executive Lei Jun announced Sunday. The electric vehicle and smartphone producer first unveiled the vehicle on May 22, adding another vehicle option in China's crowded EV lineup.

Xiaomi EV is the China-based smartphone giant's electric vehicle unit and the YU7 will be the company's first EV SUV. The new China EV model is expected to take on Tesla's popular Model Y.

Xiaomi officially launched its first model, the SU7, on March 28, 2024, which targeted Tesla's other China EV, the Model 3. The SU7 has outsold the Model 3 in China for several months and has a large backlog.

Tesla Bull Rings Warning Bells

"A year ago, when Xiaomi launched the SU7, many of our clients thought it looked like a Porsche, had better tech than a Tesla M3 and was priced like a used VW iD3," Morgan Stanley analysts Adam Jonas, a longtime Tesla bull, and Andy Meng wrote in late May. "With the YU7 small SUV, they may have done it again. It looks like a Ferrari Purosangue or Aston Martin DBX but will be priced like a VW or low-spec Model Y."

At the time, Jonas added that this Xiaomi vehicle "explains why TSLA is moving away from 'car' and going all-in on autonomy."

"The YU7 is just the latest sign that Chinese tech firms are taking EV performance and cost to the next level. China may have already won the EV battle. Who can win the autonomy war?" Jonas wrote.

The U.S. EV Giant And China

Xiaomi's U.S. shares rose 4.6% to 34.36 during Monday's stock market action, moving slightly back above a 34.33 cup-with-handle buy point.

Among other China EVs, BYD declined about 1%. XPeng gained 2.6% on Monday.

Li Auto advanced 1.6% while Nio gained 0.4%. Zeekr tilted about 1% higher during the stock market on Monday.

Tesla stock rose about 1.2% to 329.13 during Monday's stock market.

Tesla's vehicle insurance registrations in China are down compared to the first quarter, when China vehicle sales were arguably the only bright spot for Tesla's EV business.

Tesla insurance registrations in China totaled around 8,640 for the week of June 2-8, down 34% from 13,000 the previous week, according to data compiled by independent China auto industry trackers on last week. That was partly due to a Chinese holiday that affected deliveries for China EVs generally.

However, 10 weeks into Q2, Tesla registrations in China are roughly 4% below the seasonally weak Q1 and down more than 22% vs. a year earlier. Since the beginning of 2025, Tesla vehicle registrations in China are down nearly 9%. Registrations act as a rough gauge for deliveries.

Through the first five months of 2025, Tesla vehicle sales in China's domestic market have fallen nearly 8% compared with the same period in 2024, according to data released Monday by the China Passenger Car Association (CPCA). In May, Tesla sold 38,588 vehicles in China, a 30% decrease from the 55,215 units sold in the same month last year.

That comes amid solid overall growth for the China EV market.

All that points to Tesla weakness in China before the Xiaomi YU7 hits.

Q2 Delivery Expectations Come Down?

Guggenheim analysts on Friday wrote that Tesla stock continues to be driven by robotaxi and political narratives in the near-term. The analysts added that the company's fundamentals "continue to deteriorate at an alarming rate."

Guggenheim expects Q2 Tesla global deliveries to come at 360,000, and believes there will be "sizable" negative revisions in the coming weeks by other analysts.

The current consensus has Tesla vehicle deliveries of 399,000, which is 10% below a year ago but about 18% above the Q1 total, according to FactSet. However, very few analysts have updated their deliveries forecasts since late April.

At the end of last year, when Tesla was predicting 20%-30% EV delivery growth in 2025, the Q2 consensus was 502,000.

Tesla Stock Performance

TSLA advanced nearly 2% to 325.31 on Friday after declining 2.2% to 319.11 on Thursday, dipping below the 21-day line. Shares ended Friday up more than 10% on the week, reclaiming the 200-day moving average and 50-day line.

The prior week, Tesla stock dived 14.7% to 295.58, undercutting key moving averages — including its 21-day exponential moving average, the 200-day moving average and 50-day line — as Chief Executive Elon Musk and President Donald Trump traded insults and threats online. Musk and Trump have defused tensions since then.

Tesla Bounces After Musk-Trump Blowup, But Maybe There Was More To The Sell-Off

Tesla Analysts Split On Robotaxi Impact

Despite surging on robotaxi bets following the April 22 Q1 conference call, TSLA stock is now down about 18.5% for the year. The stock is also down 33% from its all-time high of 488.54.

Wedbush Securities analyst Dan Ives, a longtime Tesla bull, wrote last Wednesday that the robotaxi service launch is a "major endeavor for Musk and Tesla and we believe over the coming year we will see Robotaxi deployed in 20 to 25 cities in the U.S."

Baird analysts last week downgraded TSLA to a neutral rating, from outperform, with an unchanged 320 price target. The analysts wrote that Tesla stock has performed well since Q1 earnings, advancing more than 20%, primarily due to anticipation for the launch of the limited robotaxi service.

Musk's robotaxi ramp up rate predictions "are a bit too optimistic" and this excitement has been priced into Tesla stock, according to Baird.

Tesla is a "known" autonomous vehicle, or AV, operator in Austin as of June 13, according to Austin's Transportation and Public Works website. The EV giant is in the "testing" phase of autonomous driving operation in the city.

Meanwhile, the National Highway Traffic Safety Administration, or NHTSA, announced Friday it will "streamline" the current exemption process for automakers that wish to deploy self-driving autonomous vehicles that do not have a steering wheel or brake pedals, according to a letter posted on the regulator's website.

Tesla stock has a 21-day average true range of 5.4%. The ATR metric, available on IBD's MarketSurge charting tool, gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily stock market action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.

Tesla stock has a 70 Composite Rating out of a best-possible 99. The stock also has a 92 Relative Strength Rating and a 59 EPS Rating.

Please follow Kit Norton on X @KitNorton for more coverage.

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