Tesla is forced to lower the price of the Model Y in an attempt to slow down Xiaomi’s progress, which will enter Europe in 2027.
14/09/2026 12:30
Updated to
14/09/2026 12:30
Xiaomi's entry into the automotive market has put many established manufacturers under pressure. Its first electric models have shattered sales records, forcing competitors to rethink their products, strategies, and pricing. Everyone is affected by this, including Tesla in China. The new Model Y Performance arrives on the market with a starting price of 369,000 yuan, equivalent to 47,400 euros, with delivery times for buyers ranging from two to six weeks. All of this serves one purpose.
This release makes the Performance version the most expensive option in the Model Y lineup in this Asian country, representing the fifth available variant. Its price is 30,000 yuan (approximately 3,850 euros) higher than that of the six-seater Model Y L. However, this pricing strategy serves a strategic purpose against direct competitors: the Model Y Performance reduces the starting price of the Xiaomi YU7 GT, which is 389,900 yuan or about 50,000 euros at current exchange rates, by around 21,000 yuan (approximately 2,700 euros).
More power and 659 kilometers of range
The Performance version of the Model Y for the Chinese market features a permanent all-wheel-drive setup powered by two motors (one on each axle). The rear is equipped with a TL2 synchronous motor capable of delivering 291 kW (396 HP) of power, while the front axle is driven by a motor producing 176 kW (239 HP). Together, they deliver a maximum output of 467 kW, equivalent to 635 traditional horsepower.
To handle this increased performance and ensure superior handling, the Model Y Performance is rated at a top speed of 250 km/h. The company’s engineering team has equipped it with specific suspension adjustments, including Standard and Sport modes, recalibrating the damping stiffness to withstand the greater loads resulting from instant torque delivery.
78.4 kWh Battery and Aggressive Response to Falling Sales
The energy storage is provided by a battery module with a capacity of 78.4 kWh, supplied by LG Energy Solution’s Chinese division. Despite the increased power and dynamic performance, the Model Y Performance achieves a range of up to 659 kilometers under the local CLTC certification standard. The version already available in Europe has a range of 580 kilometers. Production takes place directly at the Gigafactory in Shanghai, ensuring access to local incentives and avoiding import tariffs.
The technical push is aimed at reviving the platform’s sales performance. The Model Y saw three consecutive months of year-on-year declines in deliveries in China in August and lost its title as the best-selling SUV in the domestic market for the second straight month. To boost sales ahead of the end of the third quarter, Tesla is adding a direct bonus of 10,000 yuan (1,300 euros) to the final payment for vehicles in inventory purchased by September 30.
Xiaomi’s entry into Europe
Xiaomi’s YU7 GT still does not pose a real threat to Tesla’s interests or those of the Model Y. However, its sales are rising month by month, contrary to the negative trend experienced by the American SUV. All of this is happening at a pivotal moment. Xiaomi has already confirmed it will officially enter Europe next year, starting with its two fully electric vehicles: the Xiaomi SU7 (sedan) and the Xiaomi YU7 (SUV). With pricing policies yet to be determined, the tech company could put Tesla under pressure if it chooses to offer similar rates. Many drivers are awaiting news, though it will still be several months before the exact figures become known.