When competitors like BYD or Xiaomi rose strongly and dominated the Chinese market, Tesla redesigned its old products.
Tesla unveiled a redesigned version of its best-selling Model Y in China on January 10. The American company hopes the new exterior design and upgraded features will help it regain market share lost to rivals such as Xiaomi and BYD.
The new Model Y starts at 263,500 yuan ($35,900), 5.4% more expensive than the previous version in China – Tesla’s second-largest market.
Deliveries in China are expected to begin in March, subject to regulatory approval. Tesla is also taking orders for the SUV in several other markets in the Asia-Pacific region. Details of Tesla’s plans for the facelifted version in North America and Europe are not yet available.
The new Model Y features a thin light bar that stretches across the front end, similar to the Cybertruck pickup, while the taillights are also a full-width light bar. Other upgrades include heated or ventilated seats and touchscreens for second-row passengers.
The long-range version now has a range of 719 km per charge, up from 688 km of the old version.
Tesla first introduced the Model Y in 2020 and it became the world’s best-selling car in 2023. The model lost sales momentum in 2024 due to competition from local rivals in China, while demand for electric vehicles declined in other markets.
Tesla was the largest electric car manufacturer in China in 2020, but Chinese competitors are growing stronger, attracting customers with smart, modern features.
The US automaker’s share of China’s battery-electric vehicle market is set to fall to 10.4% in 2024, down from 11.7% in 2023.
BYD is now China’s largest seller of electric vehicles, while consumer electronics and smart device maker Xiaomi made a strong inroad into the electric car market in 2024, selling more than 130,000 SU7s.
Even with the refreshed Model Y, analysts say it’s unlikely Tesla will regain its previous momentum in China.
Meanwhile, Xiaomi will launch its first SUV, the YU7, in June or July, and Xpeng also plans to launch the G7.
Both models have “similar features to the Model Y, such as youthful design and many technological features, making them direct competitors to the Model Y,” according to Shaochen Wang, an auto analyst at research firm Counterpoint.
Wang also noted that Tesla has not yet completed the rollout of its advanced driver assistance software Full Self-Driving in China, which could put Tesla at a disadvantage compared to many Chinese electric car brands that have already developed smart driving features.
Tesla plans to launch a six-seat version of the Model Y in China later this year.
