Tesla starts selling Shanghai-made Model Y electric SUVs in surprise launch as rivalry heats up in world’s largest EV market

Tesla’s Model Y. Photo: Handout

Tesla said it would begin taking orders for the Model Y all-electric sports utility vehicle in China on New Year’s Day with a 30 per cent price markdown, in an unexpected launch of its second made-in-Shanghai model as competition ratchets up in the world’s largest vehicle market.

Tesla’s Long Range version of Model Y, to be built at its Gigafactory 3 plant in Shanghai, will start from 339,000 yuan (US$52,074), excluding a government subsidy to prod customers to replace their petrol guzzlers for new energy vehicles (NEVs), cheaper than the price quoted six months ago when presale orders first became available for a launch expected in mid January. The Performance Range of Model Y will start from 369,900 yuan, 31 per cent cheaper than the presale quotation.

The surprise launch, with the lower price points, underscores the intense competition in China’s market for NEVs, as electric cars are also referred to. The Chinese government is throwing billions of yuan worth of incentives, subsidies and cheap loans to nurture a home-grown industry where domestic marques will eventually make up one of every five NEVs on the country’s roads, under the Made in China 2025 industrial master plan.

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“The sharp prices cuts (on Model Y) are set to fuel competition in the premium NEV segment,” said Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai. “Tesla is turning up the pressure on its global and Chinese rivals in the Chinese market, turning the customers into the beneficiaries, hence boosting overall NEV sales in China.”

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Model Y, the second Tesla vehicle to be made in Shanghai after the bestselling Model 3, can go as far as 594km (369 miles) on a single charge, with a top speed of 217km/h. The model, sporting a panoramic windscreen in the front, will have higher specifications than California-made Model Ys to cater to the preferences of Chinese customers. They include such refinements as wood panel detailing, heated steering wheels and high-efficiency particulate air (Hepa) filters for China’s frigid winters and air pollution.

Online orders started on New Year’s Day, and the first delivery can be expected within the month, Tesla said.

The Model Y’s price tag – above 300,000 yuan – technically puts it beyond the scope of the Chinese government’s price subsidy, although Tesla said it will apply to the authorities for up to 37,000 yuan in subsidies.

The ambitious roll-out, following Tesla’s record construction speed of its first offshore factory, and the 12 months it took for the first Model 3 to roll out of Gigafactory 3, underscores how hard the carmaker’s chief executive Elon Musk is pushing his team. The California-based carmaker’s eightfold jump in share price has propelled it into the world’s eighth-biggest company by value, larger than the combined capitalisation of Toyota Motor, Volkswagen, Ford, General Motors and Fiat-Chrysler.

© Provided by South China Morning Post Tesla’s Model Y. Photo: Handout

Tesla and Chinese technology media and content provider PingWest had been engaging in a war of words over the US carmaker’s China plant.

PingWest published an article, citing unidentified employees and suppliers, that described Tesla’s Gigafactory 3 in Shanghai as a sweat shop, a claim which Tesla disputed and threatened to sue over.

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This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.

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