Tesla Rolls Out New Model Y in China Amid Price War

Tesla is set to launch a revamped Model Y car to counter growing competition from local rivals in China. The new model will be larger than the current version and have a top speed of 201 km/h. Tesla's China sales have suffered this year, but deliveries of its China-made Model 3 and Model Y autos surged 16.1% in June. The revamped Model Y's price point could be pivotal in the price war currently gripping China's car market.

Tesla is set to launch a revamped Model Y car to counter growing competition from local rivals in China. The new model will be larger than the current version and have a top speed of 201 km/h. Tesla's China sales have suffered this year, but deliveries of its China-made Model 3 and Model Y autos surged 16.1% in June. The revamped Model Y's price point could be pivotal in the price war currently gripping China's car market.

The new Model Y, dubbed the Model Y L, is an extended wheelbase version with room for six passengers. It is set to launch in China this fall and is expected to be more powerful and spacious than the standard Model Y [1]. The Model Y L features dual electric motors, with one located on the front axle delivering 142 kilowatts and a second in the rear with 198 kW, resulting in a combined maximum power output of 340 kW (456 horsepower) [1].

The Model Y L is 4,976 millimeters long, which makes it about 179 mm (7.0 inches) longer than the regular Model Y. Its 1,920 mm width is identical to the five-seater version but the 1,668 mm height makes it about 40 mm taller. The 3,040 mm wheelbase (120 inches) also makes it about 50 mm longer (2.0 inches) between the axles [1].

The revamped Model Y's larger size and increased power are aimed at capturing a larger share of the Chinese market, where three-row SUVs are particularly popular. Despite the Model Y's strong sales in China last year, the vehicle has faced increased competition from local rivals this year, leading to a 17.5% drop in sales in the first half of 2025 [1].

Tesla's new variants, including the Model Y L and a longer range Model 3 Plus, are part of the automaker's strategy to counter the growing dominance of domestic competitors like BYD and NIO. The price war in China's EV market has become so intense that the government is starting to express concerns about the impact on the economy [2].

The Model Y L's price point will be crucial in the ongoing price war. While the exact price has not been disclosed, the vehicle is expected to start at over USD $50,000, which could make it a tougher sell compared to more affordable local competitors [2]. Tesla's new variants are a direct response to the introduction of new three-row EVs in China, such as NIO's Onvo L90, which starts at the equivalent of USD $39,000 [2].

The launch of the Model Y L in China comes as Tesla's global sales have been declining, and the company has been facing criticism over CEO Elon Musk's political antics. However, the company's China-made Model 3 and Model Y autos have been performing well, with a 16.1% increase in deliveries in June [1].

The success of the Model Y L in China could have implications for the U.S. market as well. If the stretched version makes it to the U.S., it could tap into Americans' appetite for large SUVs. However, the high price point in China could make it a challenge to compete with more affordable domestic options [1].

In conclusion, Tesla's revamped Model Y is a strategic move to counter growing competition from local rivals in China. The new model's larger size, increased power, and potential price point could be pivotal in the ongoing price war in the Chinese car market. The success of the Model Y L in China could also have implications for the U.S. market.

References:
[1] https://insideevs.com/news/766057/tesla-model-y-extended-wheelbase-model-x/
[2] https://www.theverge.com/news/708279/tesla-model-3-plus-model-yl-china-price-war