(Corrects name of Xiaomi model to YU7 SUV, not YU SUV, in paragraph 7)

BEIJING (Reuters) -Tesla's sales in China dropped to 26,006 vehicles in October, their lowest in three years, as the U.S. electric vehicle maker struggles with tepid demand in the hyper-competitive market.

Sales fell 35.8% from a year earlier, down from September's figure of 71,525 when Tesla began deliveries of the Model Y L, a longer-wheelbase and six-seat version of its best-selling Model Y SUV until now only available in China.

Its exports of China-made vehicles rose to a two-year high of 35,491 units last month, however, data from the China Passenger Car Association showed on Monday.

Tesla's share of China's EV market shrank to just 3.2% in October, down sharply from 8.7% the previous month and its lowest in more than three years.

Tesla's poor performance in the world's largest auto market follows dismal sales last month in European countries such as Germany, Spain, the Netherlands, and the Nordics, in the latest sign that it continues to struggle on the continent.

The company faces mounting pressure in China, its second-largest market after the United States in the third quarter.

Xiaomi, with its Tesla challengers, the SU7 sedan and the YU7 SUV, posted record sales of 48,654 units last month, even as accidents involving its sedans stoked EV safety concerns.

China's overall car sales fell expectedly in October, as consumer sentiment weakened amid diminished government subsidies and tax breaks.