Tesla launches cheaper Model Y in China; China-made car sales muted in June

Business

U.S. electric vehicle maker Tesla Inc (TSLA.O) on Thursday introduced a cheaper version of the Model Y in China, where it faces increased scrutiny from both regulators and the public and growing competition from local rivals.

Tesla’s sales of China-made vehicles slipped in June from the previous month, the China Passenger Car Association (CPCA) said on Thursday.

The company, which makes Model 3 sedans and Model Y sport-utility vehicles in Shanghai, sold 33,155 China-made vehicles, including those for export, compared with 33,463 in May.

Domestic sales in China improved, however, with Tesla selling 28,138 China-made cars in June, up from 21,936 the previous month.

Tesla shares fell 1.2% on Thursday and were set to decline for a third consecutive session.

The standard-range Model Y launched on Thursday has a starting price of 276,000 yuan ($42,588), after government subsidies are taken into account, about 20% less than a long-range Model Y.

The price cut allows its base Model Y to benefit from the subsidies, which are offered to new energy vehicles priced below 300,000 yuan.

Tesla dropped a standard-range Model Y from its U.S. website last year, as CEO Elon Musk said the range was “unacceptably low” at less than 250 miles.

The new version, which uses CATL’s (300750.SZ) lithium iron phosphate batteries (LFP), can run 525 km (326 miles) per charge, compared with 594 km for the long-range version.

BYD (002594.SZ) sold 40,532 so-called new energy vehicles, which include battery electric and plug-in hybrid vehicles, last month in China. General Motors Co’s (GM.N) venture with SAIC Motor (600104.SS) sold 30,479 such cars.

CPCA also said China sold 1.6 million passenger cars in June, down 5.3% from a year earlier.

($1 = 6.4806 Chinese yuan renminbi)