Pricing Set to Target Local Competitors
Tesla, which has been struggling due to declining sales, has relaunched its efforts to target the Chinese market-the world’s largest electric vehicle market-by introducing a model specifically tailored for China. The key feature of the new model is improved interior space, aimed at meeting the needs of affluent middle-class Chinese families.
According to Bloomberg, Tesla announced on August 19 through a post on Chinese social media platform Weibo that the price of the soon-to-be-released Model Y L SUV in China will start at 339,000 yuan (approximately 65.5 million won). Vehicle deliveries are expected to begin as early as next month.
The Model Y L is expected to compete directly with the range-extended L8 model from Chinese rival Li Auto and the Aito M8, which is backed by Huawei.
Bloomberg evaluated this move as "an effort to capture Chinese middle-class families in an extremely competitive market," and also as an attempt to make up for the delayed launch of advanced driver-assistance features known as Full Self-Driving (FSD).
The Model Y L is a new version of Tesla’s best-selling Model Y with a larger interior. Tesla also released a video on Weibo the previous day, announcing that the model would be launched soon.
This new model has an approximately 15 cm longer wheelbase (the distance between the front and rear axles) compared to the Model Y, and is equipped with three rows of seats, accommodating up to six passengers. The standard Model Y is a five-seater, but can be configured with an optional third row to seat up to seven; however, the third row in this case is typically intended for children. Notably, the Model Y L has a single-charge range of 751 km, which is nearly identical to the standard Model Y despite the larger body size.
Tesla has been facing difficulties this year as vehicle sales have declined. In China, which accounts for over 60% of the global electric vehicle market, shipments turned downward in July, and sales plummeted by 12% compared to the same month last year.
The increase in vehicle size reflects the demands of the Chinese market. Chinese automakers are rushing to release "L" models with extended front-to-rear lengths in China. This trend is driven by a preference for family travel among large families, the perception of large vehicles as a status symbol or a sign of luxury, and a driving culture in which large cars are often chauffeur-driven-all of which have contributed to the popularity of such designs.
Tesla’s expansion of its lineup is seen as a response to intensifying competition in China, where even smartphone maker Xiaomi entered the market last year by launching its first electric sedan, the SU7. Earlier this month, Tesla also announced the release of the Model 3 in China, with a driving range of up to 830 km.
Bloomberg noted, "New electric vehicle models are being launched every month in China," and analyzed that "although Tesla’s global lineup has seen little change for years, the Model Y L represents an effort to expand its market share in the world’s largest automotive market."
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