Xiaomi unveiled its hotly anticipated PU7 electric SUV in China today, in the latest potential blow to Tesla’s position in the world’s hottest EV market.

Xiaomi will start selling its YU7 electric vehicle, in July, founder and CEO Lei Jun said on Thursday, disclosing the launch date of an SUV analysts say will be the strongest rival in China to Tesla's best-selling Model Y.

Xiaomi unveiled its second car, the YU7, in Beijing on Thursday. The electric SUV is set to compete directly with Tesla's best-selling Model Y in China.

Despite steep tariffs, the Chinese carmaker leapfrogged Tesla in April, in what an analyst called a “watershed moment” for the continent’s auto market.

Despite the EU's imposition of tariffs on Chinese-made electric vehicles, registrations of such cars increased 59% in April from a year earlier.

BYD Co. sold more electric vehicles in Europe than Tesla Inc. for the first time, overtaking the American brand that long led the continent’s EV segment.