- The "lower-priced Model Y" doesn't have much change in the battery, power and chassis, according to local media.
- The timing of the launch of this new model will depend on the order performance of the updated Model Y.
Tesla's (NASDAQ: TSLA) Chinese team has led the development of a new model to cope with fierce competition in the market, local media outlet 36kr said in a report today, citing industry sources.
The new model is a "lower-priced Model Y" with no major changes to the battery, power and chassis compared to the current Model Y, the people familiar with the matter said.
Tesla China is developing the new model through depop, an internal Tesla development process that streamlines configurations to enable rapid product launches while leaving key features unchanged, according to the report.
Instead of using an English name, the project code for the new model will use letters plus numbers, the report noted.
The timing of the new model's launch will depend on the performance of orders for the updated Model Y, the report said, adding that Tesla is expected to launch the "cheaper Model Y" later this year if sales of the updated Model Y don't perform as well as expected.
Tesla launched a lower-priced version of the Model 3 in Mexico in August 2024, the report noted. The cheaper Model Y is led by its Chinese team, while the lower-priced Model 3 was led by Tesla headquarters, according to the report.
Tesla launched the revamped five-seat Model Y in China on January 10 and began offering two variants it dubbed the "Launch Series," with deliveries starting on February 26.
The two variants include a rear-wheel-drive version with a starting price of RMB 263,500 yuan ($36,360) and a long-range all-wheel-drive version with a starting price of RMB 303,500 yuan.
The Model Y Launch Series was on sale for a limited time until February 28, and buyers got an additional two-year or 40,000-kilometer extended warranty.
Tesla began selling the regular version of the new Model Y in China on March 1, with prices unchanged and the Launch Series bonus extended warranty no longer available.
Customers ordering the rear-wheel-drive version of the Model Y currently have to wait 2-4 weeks, while the long-range all-wheel-drive version is 6-10 weeks, information on Tesla's Chinese website shows.
The revamped Model Y had racked up 200,000 orders nationwide in China, 36kr said in a March 7 story citing several Tesla salespeople.
Among those 200,000 orders were a large number of refundable ones, the March 7 story noted.
In the first week after deliveries began, more than 6,000 units of the revamped Model Y were delivered, lower than the 10,000 or more that the Model Y previously typically saw, 36kr's report today said, adding that the model is apparently still in the midst of a production capacity climb.
However, the wait time for delivery of new orders is not long, suggesting that market acceptance of the updated Model Y has not been promising, the report said.
The "lower-priced Model Y" is the one bullet Tesla China has in reserve to ensure the model's success, according to 36kr.
Tesla sold 26,777 vehicles in China's domestic market in February, down 11.16 percent from 30,141 in the same month last year and down 20.55 percent from 33,703 in January, according to the China Passenger Car Association (CPCA).
The Model Y transition may have had an impact, but the most immediate reason for Tesla's sales decline in China is that product competitiveness is declining, the 36kr report today said.
Improving product competitiveness, or lowering prices, could all be strategies Tesla can adopt with the Model Y, the report said.
China is the friendliest market for Tesla, and a lower-priced Model Y could be a "silver bullet" for it to win back the Chinese market, 36kr said.
($1 = RMB 7.2468)
Tesla has received 200,000 orders in China for refreshed Model Y, report says
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