's Model Y steady sales in China will exceed 400,000 units in the future, which will further increase supply chain shipments based on Model 3, Song Shaoling, chief analyst of CITIC Securities' new energy automotive industry, said in a note on Wednesday.

At the delivery ceremony of the China-made Tesla Model 3 on January 7, Tesla announced the official launch of the China-made Model Y project.

The ceremony, held on the afternoon of January 7 at the Tesla Shanghai Gigafactory in Lingang, Shanghai, marks the first delivery of Tesla's China-made Model 3 to the public in China.

Tesla's founder Elon Musk attended the ceremony. He said that in addition to Model 3 and Model Y, other models will be manufactured in China in the future.

Model Y is a 7-seater SUV with a standard range of 230 miles. The delivery time was previously expected in the spring of 2021.

Musk said Model Y will use more advanced manufacturing technologies. Because some consumers prefer SUVs, Model Y will give consumers better experience, he said.

Model Y is Tesla's fifth car model. According to the original plan, the Model Y will be trial-produced at the Shanghai plant in October 2020, and now Tesla has advanced this plan again.

With production starts at Tesla's Shanghai plant, and price cuts to stimulate demand, Model 3 sales in China will reach 150,000 in 2020, according to CITIC Securities.

CITIC analysts predict in a Monday note that in the future Tesla sales are expected to reach more than 300,000 units, and the Chinese market will become the most important growth engine.

Tesla's product pricing system benchmarks Mercedes-Benz, BMW, and Audi. With reference to Tesla's sales performance in North America and Europe, it is expected that the steady sales of Model 3 in China will reach more than 300,000 vehicles, the note said.