Why Xiaomi CEO bought three Tesla Model Ys and ripped them apart

Xiaomi CEO Lei Jun bought three Tesla Model Ys earlier this year and tore them down piece by piece—a bold move to crack the code behind Elon Musk's bestselling electric SUV. Speaking to a packed crowd at the Beijing National Convention Center this week, the 55-year-old executive revealed his team meticulously studied every component to engineer Xiaomi's rival YU7 SUV."We bought three Model Ys at the start of this year, disassembling the parts one by one, and studied every component, one at a time," Lei told attendees, with side-by-side images of both vehicles projected behind him. The exhaustive analysis paid off: Xiaomi's YU7 racked up over 240,000 preorders within 24 hours of launching in June.

Reverse-engineering Tesla: How Chinese automakers close the gap

Yet Lei didn't trash-talk his American rival. Instead, he praised the Model Y as "very, very outstanding" and even suggested buyers who skip the YU7 could opt for Tesla's offering.

Still, he insisted Xiaomi's interior space and battery performance match or beat the Model Y at a more attractive price point—critical in a market where every yuan counts.

Battle for China heats up as Tesla loses ground to homegrown rivals

The teardown strategy underscores the brutal competition Tesla faces in its second-largest market. Sales in China slipped 4% in August to 83,200 vehicles, pressured by aggressive local players like Xiaomi, Xpeng, and Nio undercutting on price.

Around 50% of new cars sold in China are now electric, compared to just 10% in the US.Dismantling competitors' vehicles is standard practice across the auto industry. Ford CEO Jim Farley called his own Tesla teardown "shocking," discovering his Mustang Mach-E carried 1.6 kilometers more wiring than Tesla's models—excess weight that drove up battery costs and dimmed Ford's competitive edge.