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Investing.com -- Tesla (NASDAQ:TSLA), the U.S. electric vehicle manufacturer, is planning to produce a lower-cost version of its best-selling Model Y in Shanghai, according to Reters. This move is seen as a strategy to regain lost market share following a price war in China, Tesla’s second-largest market.
The new model is being developed under a project codenamed "E41" and will be built using existing production lines. Mass production is set to commence at Tesla’s largest factory by output in 2026, two of the sources stated.
The upcoming vehicle will be smaller and at least 20% cheaper to manufacture than the updated Model Y that was launched late last year, according to two of the insiders. The current Model Y, a mid-sized SUV crossover, has a starting retail price of 263,500 yuan ($36,351).
The majority of the Shanghai-produced Model Ys will be sold in China to maintain market share, according to the report. The model will also be manufactured in Europe and North America, although no specific timeline was provided.
Earlier this year, Tesla CEO Elon Musk announced that the company would introduce lower-cost models in the first half of 2025. However, he did not provide further details on the cost reduction, pricing, size, or specifications of these models.
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