Tesla unveils new model in China amid intensifying EV market competition

Tesla Inc. has officially begun accepting orders for its latest model — the Model Y L — in China, the world’s largest electric vehicle market. The launch represents a strategic effort by the US automaker to reinvigorate its lineup and respond to mounting pressure from domestic competitors and shifting consumer demand.

According to Tesla, the Model Y L is priced from 339,000 yuan ($47,184). It features a longer wheelbase, a redesigned interior with a six-seat layout, and extended range, positioning it as a more family-oriented SUV option in Tesla’s portfolio, Reuters reports.

The Model Y, first introduced in 2020, reached global prominence as the world’s best-selling car in 2023. However, its dominance has since been challenged, particularly in China, where domestic EV manufacturers such as Xiaomi and BYD have introduced increasingly sophisticated and competitively priced models. Demand for electric vehicles has also cooled in several markets, compounding the challenge for Tesla.

“In January, Tesla launched a new version of the Model Y with a redesigned exterior and upgraded features in Asia Pacific markets and in July registered plans with Chinese authorities for the new Model Y L,” the company stated.

The Model Y L’s introduction follows recent filings with China’s Ministry of Industry and Information Technology, which also revealed plans for a longer-range, rear-wheel-drive Model 3 tailored for Chinese consumers.

Despite continued product innovation, Tesla has experienced a dip in regional sales. The company’s China-made EV sales fell by 8.4% in July, reflecting both market saturation and intensifying rivalry from local brands.

Tesla's launch of the Model Y L underscores its efforts to reclaim market share and meet evolving consumer preferences in China. As the EV sector becomes increasingly crowded, the success of this model will be critical in determining Tesla’s competitiveness in a rapidly maturing market.

The company is expected to begin deliveries of the Model Y L as early as September 2025.

By Vafa Guliyeva