Tesla Model Y retail sales in China were 14,184 units in January, while Model 3 sales were 12,659 units.
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The model will be one of two new models Zeekr will launch this year that the company says will be the ceiling for performance in the A-class SUV.
Model 3 retail sales in China increased 24.53 percent in December compared to November, while Model Y sales decreased 43.94 percent from November.
Xiaomi's first model will compete with Tesla's Model 3 sedan, but is stronger in size, and performance and similarly positioned to the XPeng P7, according to local media.
Tesla is working on a redesign of the Model 3 codenamed "Highland," with a focus on reducing the number and complexity of the model's interior, according to Reuters.