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Tesla has taken the unprecedented step of debuting a major model update in China as the US electric-car maker counters intense local competition with a long-awaited facelift of its Model Y.
The refreshed version of the model that outsells its S, 3 and X siblings will start at Rmb263,500 ($35,900), 5.4 per cent more than the previous version, according to prices on Tesla’s China website on Friday.
The Elon Musk-led company expects deliveries of the revamped sport utility vehicle to begin in March, pending regulatory approval from Chinese officials. The company also offered zero-interest financing for up to five years in a presales campaign until the end of February.
Tesla China confirmed this was the first time it had chosen the mainland Chinese market to debut a major model update, although other smaller markets including Hong Kong and Malaysia also saw the new Model Y, produced in the company’s Shanghai factory, made available on Friday.
The facelift features a sleeker headlight and tail light, a shorter zero-to 100km/h acceleration time of 4.3 seconds and a longer range of up to 719km on a single charge.
“It has everything to do with the competitive landscape and maintaining appearances of innovation in China,” said Daniel Kollar, an automotive analyst at consultancy Intralink.
“A new viable [car] like the [rumoured] Model 2 would probably be better. But an upgrade to an existing model is the bare minimum they should be doing for the time being.”
Last week, Tesla reported its first annual vehicle sales drop in more than a decade, with analysts saying its ageing line-up was partly to blame. In October, Musk said developing a much-anticipated affordable Model 2 would be “pointless”. The Tesla Model 3 and Model Y, its most popular models, are almost eight and five years old, respectively.
Tesla’s failure to bring out new models beyond the so-called S3XY line-up is seen as a weakness, especially in the cut-throat Chinese market. HSBC estimated about 90 new car models had been planned for release by manufacturers in China in the fourth quarter of 2024 — about one a day — and nearly 90 per cent were EVs.
“This is making Tesla look stagnant in comparison,” said Intralink’s Kollar. “So Tesla really needs to show that they are advancing to stay fresh in Chinese consumers’ minds. Other major markets don’t have the same demand for new and improved products when it comes to their vehicles.”
Tesla delivered 36.7 per cent of its cars to consumers in China, its second-largest market, in 2024. Its share of Chinese EV sales, where pure-battery cars and plug-in hybrids are included, fell to 6.4 per cent in December from 8 per cent a year earlier, according to data from the China Passenger Car Association.
