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Tesla plans cheaper, smaller model y to boost Chinese sales

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Sources revealed that Tesla plans to make the best-selling Y Model Y version of the car in Shanghai.

The U.S. electric vehicle manufacturer is developing the model under a project numbered “E41” and will use existing production lines to build it.

The plan aims to restore lost ground in the price war in its second largest market. Mass production will start from the largest plants in 2026 output, two people said.

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Two of them said the car's production costs were at least 20% lower than the Y-type Y-type Y-type launched late last year. The Model Y is a mid-size SUV crossover that retails for $263,500 ($36,351).

One of the people said Shanghai's output will be mainly sold in China to defend market share. The man said the model will also be produced in Europe and North America without providing a timeline.

People refused to determine that the project was confidential. Tesla did not respond to a request for comment.

Tesla intends to produce a low-cost model Y led by a Chinese team, first reported by 36KR. Project name and cost reduction scale report for the first time.

CEO Elon Musk said in January that Tesla will introduce a low-cost model in the first half of 2025, but did not elaborate on the scale of reducing costs, prices, sizes or specifications.

Musk has been a global focus since he started working — a lot is negative, and it is his job to help the Trump administration trim federal spending and try to reduce the U.S. national deficit.

In an interview with Fox Business, he admitted that his work at Tesla and other companies was suffering, saying he was “hard” to run them while cutting back on government roles and services that Republicans consider waste — which leads to rhetoric Tesla shares sink 15% on Monday.

President Trump has tried to lift Musk's spirit and repair some of the damage his company has suffered since he took on a new role, by buying Tesla and doing a major show.

Trump and Musk investigate Tesla electric vehicles in front of the White House on Tuesday Essentially an extended ad For Musk.

China's market share fell to 10.4%

Meanwhile, the Y model is China's best-selling car in 2023 and 2024, but has seen increased competition from domestic peers with at least six competitor models over the past year.

Analysts say Xiaomi's Yu7 crossover could become the strongest competitor when it was founded this year.

Tesla's market share in China's battery-only electric vehicle market fell to 10.4% from 11.7% last year.

Since December, the SU7 sedan, the world's third largest smartphone maker that only started selling cars in April is the world's third largest smartphone maker.

The recent Tesla has not announced any brand new products besides the 2026 automatic “Cybercab” Robotaxi. Instead, it is resistant to competitors, especially in China, where different versions of its existing models are rapidly evolving.

Sources say it plans to launch six variants of the model Y in China later this year, an increasingly important market as sales in Europe and the United States fall.

  • Jim Pollard's Extra Input and Editing by Reuters

See also:

Musk “may cut government waste for a year” as Tesla shares plummet

Tesla Sales Sales Risks Its Carbon Credit Income – POLITICO

Tesla prepares for what Trump calls “unfairness” and prepares for India's entry

The fourth quarter of last year

Tesla

Hollywood turns to Tesla due to musk – Human Resources

Musk “erodes Tesla’s electric vehicle sales”, but is something bigger in the future?

Musk's reputation frees Australians from Tesla – ABC

Jim Pollard

Jim Pollard has been an Australian journalist in Thailand since 1999. He worked for News Ltd in Sydney, Perth, London and Melbourne, and then passed SE Asia in the late 1990s. He has been a senior editor in the United States for 17 years.

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