Tesla Files to Make 5 Different Versions of the Model Y to Boost Sales in China

by Gabrielle DeSantis

According to fresh registration data in the United States, Tesla sales in the United States are skyrocketing. Nonetheless, as many industry experts predicted, the Silicon Valley-based EV manufacturer’s market share has started experiencing a slight decrease. Additionally, the Financial Times has reported that electric vehicle sales have surged in China as demand for Teslas tumbles. However, Elon Musk plans on remedying this with five different versions of the Tesla Model Y.

China’s EV automotive market

Elon Musk visiting a Tesla Factory in China | STR/AFP via Getty Images

According to a report published in Fortune, “China is the world’s largest market for electric vehicle (EV) sales, but it still has enormous room for growth. Beijing has set a target for EVs to account for 40% of all passenger vehicles sold in 2030, up from roughly 5% today. This is a stark contrast from 2009 to 2012 when EVs were only 0.01% of the market. That 5% metric was as of early April of this year, and as far as we know, that hasn’t changed, nor will it for some time to come. To put it in a less than eloquent way, that sucks for Tesla since its EVs don’t seem to be as popular as other brands in the country. Is there any hope for Tesla and the Model Y?

Tesla sales fell in China by nearly 70% this year

In Q1 2021, Tesla’s sales numbers in China were shakier than they originally seemed. The unpopularity of Tesla EVs is multifaceted, with reasons ranging from being banned from Chinese military bases due to the possibility that they’re really high-tech spy tools to being too expensive. Amazingly, another reason is that Tesla models produced in two of the automaker’s Chinese assembly plants aren’t up to par with what consumers expect quality-wise. Furthermore, the poor publicity Tesla gets in China helps boost Chinese-branded EVs, something nearly impossible to overcome in such a politically charged nation.

An article published by CNN Business states: “The China Passenger Car Association reported that Tesla’s sales in China fell to 8,621 cars in July, down nearly 70% from June. However, the export of cars built at Tesla’s Shanghai plant jumped to 24,347 for July, compared with 5,017 in June. That means total sales of Chinese-built Teslas fell less than 1% overall.”

The CNN Business article explains that Tesla EVs only accounted for just under 4% of battery electric vehicle sales in China in July. According to analyst Gordon Johnson, one of the most strident Tesla haters, further noted that those sales numbers were a 12.6% decrease from June, proving that the company is starting to face more fervent competition from both local and foreign EV startups. This must have been disappointing news for Tesla, considering that the Model Y was China’s third best-selling EV in February.

Will five new Tesla Model Y versions fix the problem?

As the old saying goes, if you can’t beat them, join them. In the case of Tesla’s plummeting demand in the world’s largest EV market, Elon Musk ” […] has filed with the Chinese government to produce five more versions of the Tesla Model Y electric SUV at Gigafactory Shanghai,” as per Electrek. Musk’s first line of attack deals with possibly the top issue Chinese consumers have with buying a Tesla, that being price. So, rumors from China show that Tesla has finally succeeded in building its first “under-$25,000 Tesla prototype” at one of those factories.

A notorious auto-industry insider and contributor named 不是郑小康 on the Chinese blogging site “Sina Weibo” leaked the information, reportedly. The leaker also claimed that suppliers had already begun producing components for the new Model Y versions, with pre-production models beginning to roll off the assembly line toward year’s end. For now, only one or two media influencers have vouched for the accuracy of the leaks, which means the information should be taken with a grain of salt. If true, this means Musk has finally followed through with a promise he has been touting for several years.

Additionally, another growing EV market is in India, though significantly smaller than other EV markets. However, India imposes 100% taxes on foreign automakers, likely pushed by its five dominant EV manufacturers: JBM Auto Ltd, Olectra Greentech Ltd., MG Motor India, Mahindra & Mahindra Ltd., and Tata. Apparently, Musk is in no hurry to enter India’s EV market until the tax rate is lowered to around 40%. Good luck with that, Musk.

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