SHANGHAI – Tesla is set to introduce a six-seat variant of its popular Model Y electric vehicle in China, with production slated to begin in late 2025. This move underscores the U.S. automaker’s efforts to revitalize its best-selling yet maturing EV lineup in the face of intensifying domestic competition.
The electric vehicle giant has reportedly instructed its suppliers to prepare for a double-digit increase in Model Y production at its Shanghai facility. However, specific details on how Tesla plans to boost output remain unclear, especially given that the company is still awaiting approval to expand its operations onto an adjacent 70-hectare (172-acre) plot of former farmland.
This production ramp-up comes on the heels of Tesla’s success with its updated Model 3 sedan. In the first half of 2023, the company saw a 6% year-on-year increase in Model 3 deliveries, both domestically and internationally, following the launch of a refreshed version last year.
The Model Y, first introduced in 2020, has been undergoing a revamp under a project codenamed “Juniper.” Reuters previously reported on this initiative, which will result in an updated five-seat variant expected to launch in early 2025, slightly later than the initially planned 2024 release.
The decision to add a six-seat option to the Model Y lineup highlights the mounting pressure Tesla faces from Chinese competitors. In contrast to its U.S. strategy, which prioritizes self-driving technology and robotaxi development, Tesla’s focus in China appears to be on expanding its vehicle offerings to meet diverse consumer needs.
This year alone, at least four Model Y competitors have been unveiled by domestic manufacturers, including the Nio Onvo L60 and Zeekr 7X. These rivals are attracting attention with more spacious interiors and competitive pricing for their flagship models.
Despite the growing competition, the Model Y crossover remains the best-selling car in China across all power types, with 207,800 vehicles sold in the first half of 2023. However, BYD’s Seagull sedan is quickly gaining ground.
Tesla anticipates a boost in its overall China sales for the third quarter, driven by strong growth in smaller cities. This optimistic outlook comes despite recent global layoffs that affected its sales force in May, suggesting improved profitability. The company also plans to introduce its Full Self-Driving feature in China by year-end, which could further stimulate sales.
It’s worth noting that while Tesla offers a seven-seat Model Y in the U.S., sources indicate that the cramped third row would likely be unpopular in China. “It’s not even large enough for a large-sized dog,” one source commented, highlighting the need for a more spacious six-seat configuration tailored to Chinese consumer preferences.
As Tesla continues to adapt its strategy to the competitive Chinese market, the introduction of the six-seat Model Y variant represents a critical move in maintaining its leading position in the world’s largest automotive market.
