Tesla will produce a cheaper version of the Model Y electric car in Shanghai. Thus, the electric car manufacturer seeks to win back positions in its second largest market, which were lost during the price war, UNN reports with reference to Politico.
The American electric car manufacturer is developing a model as part of a project codenamed "E41". The new development will be manufactured using existing production lines. Mass production will start in 2026 at Tesla's largest plant, which is located in Fremont, California.
Company officials familiar with this project report that the car will be smaller and at least 20% cheaper than the updated Model Y released at the end of last year. The Model Y, a mid-size SUV, costs from $36,351.
Shanghai products will mainly be sold in China to protect market share. It is also known that the model will be produced in Europe and North America.
CEO Elon Musk said in January that Tesla would introduce cheaper models in the first half of 2025, but did not specify the size of cost reductions, prices, sizes or specifications.
It is worth noting that the Model Y was the best-selling car in China in 2023 and 2024, but it faced strong competition from Chinese companies that released at least six similar models last year.
Supplement
Tesla has expressed concern to US President Donald Trump's administration about possible losses for American exporters due to trade wars and economic countermeasures. The electric car manufacturer fears a likely increase in costs.
Recently, Donald Trump bought a new Tesla to demonstrate his support for Elon Musk's electric car company. Musk himself helped Trump choose a car on the way to the White House. The US President's choice fell on a shiny red Model S sedan.