Key Takeaways
- Tesla is set to produce and launch a lower-cost Model Y vehicle in China likely in 2026, Reuters reported Friday—citing people with knowledge of the matter.
- The vehicle will also eventually be launched in Europe and North America, but Reuters’ sources did not have a timeline for that launch.
- Tesla’s sales in China have been pressured by a number of domestic competitors, with sales down a reported 50% year-over-year in February.
Tesla (TSLA) is looking to produce and sell a less expensive version of its Model Y SUV in China starting next year, according to a Friday report from Reuters.
The news organization, citing three people with knowledge of the matter, reported that the vehicle will be mass produced in Tesla’s China factory in 2026. It will likely cost at least 20% less to produce, retailing for less than the Model Y’s current base price of 263,500 yuan ($36,405), Reuters reported.
Reuters cited an anonymous source saying the lower-cost Model Y will eventually also be launched in North America and Europe, but did not provide a timeline. Tesla did not immediately respond to a request for comment.
A lower-cost electric vehicle has long been a goal of Tesla, with CEO Elon Musk denying reports last year that the company had abandoned the project. Musk has said in recent quarters that Tesla is on track to produce and launch a lower-cost EV in the first half of this year, but has not yet provided details like a launch date or price.
China’s EV market has become increasingly competitive with a number of domestic EV makers growing and taking some of Tesla’s market share. Tesla’s China sales were down nearly a reported 50% in February from the same time last year.
Tesla shares were up around 2% in premarket trading Friday. They would have to gain around 9% from Thursday’s closing price to finish higher for the week after a 15% drop Monday, otherwise shares will have declined for eight straight weeks.
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