Tesla Prices New Model Y With Eye On Luring Chinese Families

Tesla Inc. priced its updated, six-seat Model Y sport utility vehicle in the same range as local rival Li Auto Inc.’s extended-range L8 model, to win over middle-class families in China’s hyper-competitive market.

The new variant of Tesla’s top-selling model will be available for as low as 339,000 yuan ($47,182), the company posted on Chinese social media platform Weibo on Tuesday, with deliveries anticipated as early as September.

Model Y L, as it’s referred to by the carmaker, is roughly 15-centimeter (5.9-inch) longer than the Model Y and is designed to accommodate a third row. The vehicle has a range of 751 kilometers (467 miles) on a single charge, nearly the same as the performance version of the existing five-seater variant that starts from 313,500 yuan.

The pricing puts the six-seater model in direct competition with Li Auto’s L8 variant and the Huawei-backed Aito M8. Tesla has been losing ground to domestic manufacturers, with shipments from its Shanghai factory slipping back into decline in July and local deliveries plummeting 12% from the same period last year.

Tesla’s launch at that price point “looks competitive in an increasingly crowded market,” Eugene Hsiao, an analyst at Macquarie Capital, said.

The new variant’s pricing seeks to make up for delays in more advanced driver-assistance features, or so-called Full Self-Driving (FSD). The company piloted the functions with its users since February, but has made very slow progress.

While Tesla’s global lineup has remained largely consistent for years, the new Model Y L suggests an effort to gain share in the world’s largest automotive market, where new EV models are launched every month. Earlier this month, the American EV maker unveiled a longer-range Model 3 sedan in China, capable of an extended 830 kilometers on a single charge.