Tesla may be hoping that the arrival of a less expensive Model Y will help the company recover from a rough few months in China. On Thursday, the automaker TSLA, -2.26 percent introduced the Standard Range (SR) Model Y on its Chinese website, with a starting price of $276,000 ($42,589), down from $291,840 before government subsidies. According to the website, delivery of the vehicles will begin in August.
Tesla’s first Model Y was approved for sale in China in late 2020, with the lowest price being $347,900 ($53,700). The updated version will allow consumers to take advantage of government discounts on electric vehicle sales in China, which are only available for vehicles costing less than $300,000. As the pandemic spread, plans to eliminate the incentives were abandoned, and the government moved to boost sales of electric vehicles. Tesla faces plenty of domestic competition, including NIO NIO, -8.45 percent, XPeng XPEV, -5.86 percent, and BYD 1211, -2.40 percent. China is a crucial market for electric-car makers, and Tesla faces plenty of domestic rivalry.
Certain analysts believe that sales problems in that country, as well as some public-relations issues — anger over its treatment of consumer complaints and a recall that sparked more concerns — are at the root of the stock’s decline this year. Tesla’s stock has dropped roughly 9% this year, compared to a 14 percent increase for the Nasdaq Composite and a near 15% climb for the S&P 500. In premarket activity on Thursday, shares were down more than 2% against a backdrop of broader global market volatility. Tesla reported 206,421 vehicles produced and 201,250 vehicles delivered in the second quarter, closely in line with broader analyst estimate and a new high for the firm. It announced record sales in April, citing the Model Y’s great success in China. Read: Tesla’s sales demonstrate the business is faring better than other automakers in the face of a semiconductor scarcity. On August 4, Tesla is expected to release its second-quarter earnings./n
