Tesla intends to begin producing a six-seat Model Y variant in China in late 2025.
TakeAway Points:
- Tesla intends to start producing a six-seat Model Y variant in China in late 2025.
- Tesla’s sales in China logged their best month for the year so far in August, with the U.S. electric vehicle maker benefiting from brisk sales in smaller cities.
- Tesla said it sold more than 63,000 cars in the world’s biggest auto market last month, a hefty 37% jump from July but probably still down from August last year when it sold 64,694.
Six-seat Model Y
This move comes as the American manufacturer looks to boost interest in its best-selling but ageing electric vehicle (EV).
Tesla has asked suppliers to prepare accordingly for a double-digit increase of Model Y output at its Shanghai factory, said one of the people, who declined to be named as the plan is not public.
It was not clear how Tesla would raise production at the plant, which is awaiting approval to expand on 70 hectares (172 acres) of former farmland. It has already seen a 6% on-year increase in domestic and overseas Model 3 deliveries during January-June, boosted by last year’s launch of a renewed version.
Tesla released the Model Y in 2020 and has been revamping it under a project dubbed “Juniper,” reported previously. That variant will seat five and will launch in early 2025 rather than this year as initially planned, the second person said.
The addition of a six-seater variant underscores pressure in China from domestic rivals, whereas in the U.S., Tesla is prioritising self-driving technology and robotaxi development.
Those rivals have unveiled at least four Model Y competitors this year, including the Onvo L60 from Nio and the 7X from Zeekr, with roomier interiors and at prices lower than those of flagship models.
The Model Y crossover is the best-selling car in China among all power types, with January-June sales of 207,800 vehicles, though the Seagull sedan from BYD is catching up.
Tesla expects its overall China sales to increase in the third quarter due to strong growth in smaller cities, even though it shrunk its sales force as part of global layoffs in May, pointing to improved profitability.
Sales could also get a boost from the introduction of its Full Self-Driving feature planned for China by year-end.
Tesla sells a seven-seater Model Y in the U.S. but a cramped third row would make it unpopular in China, the people said.
“It’s not even large enough for a large-sized dog,” one of the people said.
Tesla’s China sales boost in August
Tesla’s sales in China logged their best month for the year so far in August, with the U.S. electric vehicle maker benefiting from brisk sales in smaller cities.
Tesla said it sold more than 63,000 cars in the world’s biggest auto market last month, a hefty 37% jump from July but probably still down from August last year when it sold 64,694.
While an encouraging improvement, its performance lags major Chinese rivals by a wide margin.
BYD, the world’s biggest EV maker, said its China passenger vehicle sales surged 35% in August from a year earlier to a record monthly high of 370,854. Other local EV competitors, including Leapmotor and Li Auto, also reported higher sales.
Like many other automakers, Tesla has been badly bruised by a protracted price war in China, where economic growth has also been sluggish and consumer confidence fragile. Its China sales declined 5% for the first half of the year.
Although Tesla has cut its local sales force as part of a global downsizing, a number of factors have helped recent sales momentum.
Tesla has since April offered zero-interest loans of up to five years for buyers, while several local governments have made its cars eligible for official car purchases in recent weeks.
It also received a key regulatory nod earlier this year, with the country’s top auto industry association saying that data collection by Tesla vehicles was compliant with regulations, allowing Tesla cars to enter some government compounds that they used to be banned from.
An analysis by China Merchants Bank International of Tesla’s China sales in July showed a 78% year-on-year increase in deliveries in so-called tier-three cities, while its sales in second-tier cities such as Hangzhou and Nanjing rose 47%.
Separate data from the China Passenger Car Association for Tesla China-made vehicles, which includes exports, showed sales grew 3% in August from a year earlier to 86,697 units.
Deliveries of its China-made Model 3 and Model Y vehicles rose 17% from July.
Tesla plans to produce a six-seat variant of its Model Y car in China from late 2025, two people with direct knowledge of the matter said. The move is aimed at increasing the appeal of its best-selling yet aging EV.
