Sales of Tesla's Model Y vehicles in China experience a continuation of their decline in July
Tesla's Model Y Sales in China Decline Amidst Intense Competition and Limited Product Range
Tesla's Model Y sales in China have been on a downward trend this year, with the latest figures showing a 15.24% year-on-year decline in July. This marks the third consecutive month of year-on-year decline for the American electric vehicle manufacturer.
According to reports, the Model Y's performance in China has been weak this year, with retail sales declining year-on-year in five out of the first seven months. The Model Y, one of Tesla's most important models, has faced stiff competition in the Chinese market, where consumers prefer SUVs with larger interior spaces.
In July, Tesla exported 12,197 units of the Model 3 from China, a 46.47% decrease year-on-year, but a 228.76% increase from June. The Model 3's retail sales in China during the same month were 9,851 units, down 0.78% year-on-year, marking a 40.79% decrease from June.
In an attempt to regain competitiveness, Tesla plans to launch the longer six-seat version of the Model Y, known as the Model Y L, in China in the autumn of 2022. This model targets the popular Chinese market segment favouring multi-generational travel in larger SUVs and MPVs. The Model Y L offers a larger interior space with three rows of seats accommodating six passengers and a greatly extended driving range of up to 751 kilometers.
Elon Musk, Tesla's CEO, has indicated that the Model Y L is specifically designed for markets like China and Asia where bigger family vehicles are in demand. He does not expect it to be launched in North America due to different market preferences and the growing prominence of robotaxis and self-driving cars there, which reduce the need for larger SUV variants.
In the first seven months of the year, the Model 3's retail sales in China totaled 101,770 units, up 26.54% year-on-year. In the same period, the Model Y saw exports of 57,615 units from China, up 6.17% year-on-year.
It is worth noting that Tesla's Shanghai factory produces the Model 3 sedan and Model Y, which are delivered to local customers and also serve as an export hub. The factory has been instrumental in Tesla's growth in the Chinese market.
In summary, the decline in Tesla's Model Y sales in China can be attributed to intense local competition, Tesla's relatively narrow product range in China, and reduced exports. The introduction of the Model Y L, a six-seat SUV with a CLTC range of up to 751 kilometers, is aimed at boosting sales in the Chinese market, where bigger family vehicles are popular. The Model Y L is expected to be launched in China in the fall.
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