Lei Jun, the billionaire cofounder of Chinese tech giant Xiaomi, launched an electric SUV that could be a strong competitor to Tesla’s Model Y in China, which sent Xiaomi’s Hong Kong-listed shares as much as 8% higher on Friday.

Gains were pared to 3.3% as of 11:30 a.m. but the stock is still up more than 70% this year. Lei, who is the company’s chairman and CEO, now has a net worth of $46.5 billion largely based on his Xiaomi stake, according to Forbes estimates. The 55-year-old is China’s 4th richest billionaire after Tencent cofounder Ma Huateng, who has wealth of $53 billion.

Investors were wowed by the YU7. Launched Thursday night in Beijing, the electric SUV is meant to directly compete with Tesla’s Model Y. The standard version has an ultra-long driving range of 835 kilometers on one charge and is priced from 253,500 yuan ($35,366) – cheaper than Model Y’s starting price of 263,500 yuan. Tesla’s Model Y can only go 593 kilometers on a charge, according to its website.

After the launch, pre-orders for the YU7 reached 289,000 units within the first hour, which is “almost unprecedented” in China’s auto sector, according to Yale Zhang, Shanghai-based managing director of consultancy Automotive Foresight, by WeChat. Deliveries of the SUVs are expected to start in July, according to the company.

“I think we have witnessed a miracle in China’s auto industry,” Lei said at a post-launch press event, when a Xiaomi staff showed him pre-order figures. “I truly think this is a spectacular result.”

The billionaire has not been shy about his challenge to Tesla. During the YU7 launch, he frequently compared it to Model Y, which in 2024 was China’s best-selling SUV with deliveries reaching 480,309 units, according to figures compiled by local media.

The YU7 comes in two advanced versions that feature faster acceleration speed, with the YU7 Pro starting from 279,900 yuan and the Max from 329,9000 yuan.

“We will face our strongest competitor directly, and the most brutal competition directly.” Lei said on stage in Beijing. “Still, I am very confident.”

Xiaomi’s SUV could have a major impact on Model Y sales in China in the second half of the year, says Automotive Foresight’s Zhang. The company needs time to ramp up production, and could deliver 100,000 YU7s this year, according to a Friday research note by Deutsche Bank.

The new model, together with Xiaomi’s SU7 electric sedan that was launched last year, will bring 2025 full-year deliveries to 400,000 units, according to the Deutsche Bank note. This means that Xiaomi is on track to exceed Lei’s target of delivering 350,000 cars this year, a goal the billionaire stated after witnessing the popularity of his product.

Xiaomi appears to be recovering from the negative impact of a fatal crash in March. In April, its stock plunged when investors belatedly learned that an accident involving a Xiaomi EV in self-driving mode killed three people on an expressway in China’s Anhui province.

The company doesn’t appear to have been officially penalized, but Chinese regulators have since scrutinized the marketing of self-driving technologies amid worries that such capabilities have been exaggerated. The government has since banned auto makers from using terms “smart driving” and “autonomous driving” when they advertise driver-assistance features. Authorities have also required companies to seek approval and carry out sufficient tests before updating software in vehicles that have already been sold.