At this point, someone might want to check on Elon. Because firing your head of manufacturing after your biggest competitor just sold 200,000 cars in three minutes… doesn't exactly scream “we’ve got a plan, and we know what we’re doing.”

In case you missed it… Xiaomi, the Chinese tech company best known for making cheap electronics, is now full-blown competing with Tesla. Yesterday, they launched their new electric SUV (the YU7) and within three minutes (under 180 seconds), they had over 200,000 pre-orders. For context: Tesla doesn’t even sell that many cars in China over multiple months. Make no mistake about it… this was a direct shot at the Model Y, Tesla’s best-seller.

The YU7 starts at $35,000 in China. Tesla’s Model Y? $36,760. So Xiaomi came in a little cheaper… but that’s not what’s scaring Tesla. It’s that the YU7 is arguably a better car. It’s got more range (472 miles vs. Tesla’s 438), Nvidia’s new Thor chip, driver-assist software, hand-motion controls, Apple CarPlay (yeah, Tesla still doesn’t have it), and delivery estimates as soon as next month. It goes way past being cheaper… it’s faster, flashier, and loaded with features that Tesla has refused to offer for years.

And the launch wasn’t quiet either. Xiaomi’s CEO Lei Jun came out swinging. “Tesla said, ‘Go ahead and compare,’” he said. “We at Xiaomi just won’t accept defeat.” That was yesterday.

Today (after popping loads of pills last night… kidding) Elon Musk fired Omead Afshar, Tesla’s VP of manufacturing and one of the most senior execs at the company (since 2017). Afshar ran sales and production for North America and Europe… aka, two of Tesla’s most important markets. He helped launch Giga Texas. This wasn’t a soft exit. One day he was praising Elon on X for the robotaxi rollout. The next, he was gone. (Classic case of “great job, now clean out your desk.”)

And their numbers are falling off a cliff. Tesla’s Q1 profit fell 71% year-over-year. Their sales in Europe dropped nearly 28% in May alone. And for the first time in over a decade, Tesla is selling fewer cars than the year before (yes, this counts even the nightmare of 2022). This is all happening while Chinese EV brands (BYD, XPeng, NIO, and now Xiaomi) are shipping fully-loaded EVs at lower prices with better margins, thanks to tight local supply chains and a Chinese government that actually wants them to win. So yeah, Elon’s under more pressure than Robinhood’s server in January 2021 (right before Vlad hit the pause button and handed Wall Street the aux cord).

But let’s just call it what it is: firing your manufacturing guy isn’t going to stop Xiaomi from eating your lunch. This isn’t a leadership issue. It’s a product and pricing problem. The YU7 looks cooler, drives farther, has features customers have been begging for, and it costs less. That’s not something you fix in the C-Suite (especially firing a top executive that was part of the reason your stock exploded over 1,400%).

Tesla’s advantage used to be that it was the only one making good EVs at scale (and really cool ones at that). That’s over. Now it’s stuck between luxury brands that are catching up on tech and Chinese brands that are beating it on price. And when your main strategy is tweeting memes and promising robots “next year,” while your competitors are shipping actual cars with better specs today… the market starts to notice eventually (even if some folks are still convinced the robotaxi works, despite the guy sitting in the front seat “just in case”).

Xiaomi’s stock popped 8% on the news… and on the other end of the spectrum, Tesla’s down 14% on the year.

None of this means Tesla’s doomed. They still lead in battery tech and charging infrastructure. And they still have massive brand equity… for now. But the core issue is this: if Tesla can’t offer better value than a phone company that’s been in the car business for less than a year, something’s broken. And it's probably going to take more than a pink slip to fix it.

At the time of publishing this article, Stocks.News holds positions in Tesla, Apple, and Robinhood as mentioned in the article.