Tesla ventures into China: Six-seater version of the Model Y starting next year

The US electric vehicle manufacturer Tesla plans to produce a six-seat variant of the Model Y at its Gigafactory in Shanghai next year. This is part of a project codenamed 'Juniper,' initiated after Tesla lost more than half of its market share in China's premium electric vehicle segment due to intense competition and price cuts. "Tesla now needs to step out of its comfort zone since several automakers have introduced models to challenge the best-selling Model Y," said Zhao Zhen, sales director at Shanghai-based dealership Wan Zhuo Auto. The Chinese market segment is characterized by discerning consumers who always seek the best product at the lowest price. The Shanghai version of the Model Y is currently configured with five seats in two rows, while the updated model in North America offers seven seats. In contrast, the six-seat version for the Chinese market would have two seats in each of the three rows, with the middle seats of the second row being foldable to facilitate entry and exit. The revamped variant is expected to compete with Li Auto's L8 and L9, two large SUVs highly popular among affluent families in China. The Beijing-based company sold about 95,000 L8 and L9 models in the first seven months of this year. Tesla's Shanghai factory delivered a total of 500,740 units of the Model 3 and Model Y to mainland Chinese customers during this period, a decline of 7.4 percent compared to the previous year. Tesla's market share in the Chinese electric car market fell to 9.6 percent, down from a record 22.9 percent in March 2021. "Tesla is losing appeal among Chinese drivers as they now have more options from local brands with longer ranges and more advanced digital technologies," said Eric Han, senior manager at the consultancy Suolei in Shanghai. Additionally, Chinese automakers are selling their vehicles at lower prices. Despite this, the Chinese-made Model Y continues to enjoy high popularity thanks to its tested quality and mature technologies. It manages to compete against several new models that Chinese brands have introduced over the past three months to reduce Tesla's market share. "Tesla surpasses its local competitors in terms of brand recognition, production efficiency, and mature technologies," said Jack Yu, a 20-year-old student from Shanghai. However, he chose against buying a Tesla and opted for an electric vehicle from a Chinese brand. Tesla is currently offering interest-free loans for the purchase of the Model 3 and Model Y, allowing customers to save at least 20,000 Yuan on a five-year loan of 200,000 Yuan.