Tesla Model Y is priced at 263,500 yuan in China, and with the recent launch of Xiaomi YU7, the American EV maker is likely to witness a dip in its market share.

Chinese EV and smartphone maker Xiaomi on Thursday priced its new electric YU7 SUV from 253,500 yuan ($35,364), almost 4% below Tesla's Model Y, stepping up the challenge to the U.S. firm in the world's largest auto market.

Chinese smartphone and appliance maker Xiaomi launched its second model and orders started pouring in. The firm received 289,000 orders in one hour