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American electric vehicle giant Tesla is gearing up to introduce a six-seat version of its popular Model Y crossover in China, according to sources familiar with the matter. The new variant, slated for production in late 2025, aims to bolster Tesla's position in the world's largest automotive market amid intensifying competition from domestic rivals.
The Model Y, Tesla's best-selling vehicle globally, has dominated the Chinese market since its 2020 debut. In the first half of 2024, Tesla delivered 207,800 Model Ys in China, outpacing all other vehicles regardless of powertrain type. However, the landscape is rapidly evolving as local manufacturers unveil their own electric SUVs targeting Tesla's market share.
Industry analysts point to recent launches like Nio's Onvo L60 and Zeekr's 7X as direct competitors to the Model Y, often boasting more spacious interiors and competitive pricing. "Tesla needs to innovate to stay ahead," remarks auto industry consultant Zhang Wei. "A six-seat option could appeal to larger families and maintain the Model Y's versatility."
Tesla's Shanghai Gigafactory, which currently produces the Model 3 sedan and Model Y, is central to the company's China strategy. Sources indicate Tesla has asked suppliers to prepare for a "double-digit increase" in Model Y production, though specifics on how output will be raised remain unclear. The facility is awaiting approval to expand onto 70 hectares of adjacent land.
The six-seat Model Y represents a departure from Tesla's U.S. strategy, where the company offers a seven-seat configuration. "The third row in the seven-seater is too cramped for Chinese consumers," one source noted. "It's barely suitable for a large dog, let alone adults."
This move comes as part of a broader refresh of the Model Y lineup. Tesla is also developing an updated five-seat version under the codename "Juniper," now expected to launch in early 2025 rather than late 2024 as initially planned.
Despite recent challenges, including global layoffs that affected its China sales team, Tesla remains optimistic about its prospects in the country. The company anticipates sales growth in the third quarter of 2024, particularly in smaller cities where EV adoption is accelerating.
Tesla's commitment to the Chinese market extends beyond new models. The automaker plans to introduce its Full Self-Driving feature in China by the end of 2024, potentially providing another competitive edge.
Tesla's ability to adapt to local preferences while maintaining its technological lead will be crucial. The six-seat Model Y represents a strategic bet on the continued importance of the Chinese market to Tesla's global ambitions.
