The new Model Y variant will be 20 per cent cheaper than the existing editions, which are priced from 263,500 yuan (US$36,406) to 303,500 yuan, according to two people with knowledge of the matter. The US carmaker plans to start producing the car next year at its Shanghai factory.
Tesla’s locally made vehicles have lost their lustre among mainland drivers amid brutal price competition and rapid technology advancement by domestic rivals. Deliveries from Tesla’s Gigafactory 3 in February slumped 51.5 per cent month on month and 49.2 per cent year on year to 30,688 – the lowest since July 2022.
“Tesla needs to launch new models or at least fine-tune its existing product line to retain its market share in China,” said Zhao Zhen, a sales director at Shanghai-based dealer Wan Zhuo Auto. “A lower-priced Model Y could technically help it bolster sales now that local rivals can offer midsize intelligent EVs at prices just half those of Tesla’s vehicles.”
In 2020 when the Gigafactory started operations, Tesla’s mainland sales of around 180,000 units accounted for more than 16 per cent of the total EV sales nationwide. Last year, Tesla’s mainland deliveries stood at 657,000, which translated to a 6 per cent market share. In February, that figure dropped to 4.3 per cent.
