Tesla to Launch Lower-Cost Model Y 'E41' in Shanghai by 2026, Aiming to Counter BYD's Growth

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Updated Mar 14, 2025, 09:04 AM

Tesla Inc. is set to produce a lower-cost version of its Model Y electric vehicle at its Shanghai factory, with mass production slated to begin in 2026. The new model, codenamed 'E41', will be smaller and cost at least 20% less to produce than the refreshed Model Y launched in late 2023, which starts at 263,500 yuan ($36,351). This initiative aims to regain market share in China, where Tesla has faced increasing competition and a decline in sales. The lower-cost Model Y will primarily target the Chinese market, though plans for production in Europe and North America are also in place. The move comes as Tesla navigates a price war in China, where its market share in the battery electric vehicle segment dropped to 10.4% in 2023 from 11.7% the previous year. The company's strategy includes leveraging existing production lines to introduce this new variant. Amidst this, Tesla's sales in China have been challenged by local competitors, with BYD notably outperforming Tesla in recent months. The introduction of the lower-cost Model Y is part of Tesla's broader strategy to remain competitive in the rapidly evolving Chinese EV market. Tesla also plans to introduce a six-seat variant of the Model Y in China later this year and is preparing to launch its 'Cybercab' autonomous robotaxi in 2026. Xiaomi's upcoming YU7 crossover is anticipated to be a strong competitor to the Model Y.

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#Shanghai #China #Tesla #Chinese #Europe #North America #BYD #Chinese EV #Cybercab #Xiaomi #YU7

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Sources

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Wall St Engine

@wallstengine

Tesla $TSLA reportedly plans to roll out a more affordable Model Y in 2026, cutting production costs by at least 20% compared to the refreshed version. The Shanghai Gigafactory will lead production, focusing on the Chinese market, while Europe and North America will also… https://t.co/LNct4kiyLn

Herbert Ong

@herbertong

🚨🚨 Tesla will produce a lower-cost version of its best-selling Model Y in Shanghai, priced at least 20% less Tesla is developing the model under a project codenamed "E41" and will build it using existing production lines, the people said. Mass production will begin at its… https://t.co/7SZlX2yh3R