The Tesla Model Y is the newest car launched by the Californian brand around the world. The crossover is smaller in size than the Model X and looks similar to Model 3. The price of the crossover starts at $49,990 in the United States. This makes it the cheapest electric SUV available in the country. However, Tesla was accepting orders for the Model Y at a price of 488,000 yuan ($68,580) for the Long Range model and 535,000 yuan ($75,185) for the Performance version. Since then assembly of the Model Y has started in the Shanghai Gigafactory. This has allowed Tesla to launch the Model Y at a lower price point than expected.
Tesla Model Y launched at lower than expected price in China
The new prices for the Model y are 339,900 yuan ($51,890) for the Long Range and 369,900 yuan ($56,482) for the Performance version. This price is lower than the price at the time of booking. It is undercutting the car’s Chinese competitors. The Model Y might not have a lot of competition in the USA, but the Chinese market is different. There is plenty of competition in every vehicle segment in China. The market is price sensitive as well. On top of that, the customers tend to prefer Chinese brands to international ones. Hence it isn’t just necessary to have a better product, it should also be priced well enough. The potential competitors of the Model Y currently cost somewhere between 300,000 to 350,000 yuan. This new and aggressive pricing of the Model Y could help Tesla in capturing some of the market shares of those cars.
The aggressive EV market of China
Some of the major players in the Chinese EV market are NIO, Li, and Xpeng. All 3 are Chinese companies. All of them are relatively new companies. These companies are widely successful in the Chinese market. They are the ones that Tesla is trying to dislodge from their perches. The competition between these brands is extremely fierce. However, all the competition hasn’t hurt the EV stocks. The shares of NIO, Li, Xpeng, and Tesla have skyrocketed over the last year. For instance, NIO’s stock rose approximately by a whopping 1,110%, overshadowing Tesla’s impressive 743% gain. All the brands fight tooth and nail in the Chinese EV market. And this new bomb that Tesla has set off by launching the Model Y at a lower price means that the fight is about to get a lot uglier than before.
The Chinese Government tries its best to ensure that Chinese brands receive all the support that they need. They are given multiple subsidies and are given various production benefits as well. This could potentially hurt Tesla’s charge in China. However, from past experience, it is very unwise to bet against Tesla and Elon Musk. The fight for supremacy in the Chinese EV market just got a whole lot more exciting.