Tesla TSLA is betting on a new addition to its Model Y lineup to revive its slowing sales in China amid stiff competition. The company has launched a long-range rear-wheel-drive Model Y, offering up to 821 km of range under China’s CLTC standard — the longest for any Model Y so far.
The new version uses a 78.4-kWh battery from LG Energy Solution and starts at RMB 288,500 (around $40,500). With about 38% more range than the entry-level model, the Y+ is designed to appeal to range-conscious buyers. This could help Tesla better compete in China’s crowded EV market, where local rivals are launching new models almost monthly.
The launch is timely. Tesla’s sales in China fell to 26,006 units in October, its lowest level in three years and down 35.8% from a year ago, per China Passenger Car Association, as cited by TeslaNorth.com. Sales fell sharply from 71,525 units in September, when the company launched the Model Y L, a six-seat version exclusive to China.
Tesla’s market share in China dropped to just 3.2% last month, a sharp decline from 8.7% in September. The drop is striking because overall EV sales in China are still growing, showing that Tesla’s slowdown is more company-specific than market-driven. The slump isn’t limited to China. Tesla also reported softer demand across Europe, including Germany, Spain and the Netherlands, underscoring the broader challenges it faces in maintaining momentum outside the United States. China is Tesla’s second-largest market, but domestic automakers continue to roll out cheaper and more feature-packed EVs, making it difficult for Tesla to compete.
Interestingly, exports from Tesla’s Shanghai plant jumped to 35,491 units in October, the highest in two years — suggesting Tesla may be redirecting production as domestic demand cools.
Still, the year-end period often brings a pickup in Chinese EV sales, especially before incentives tighten in 2026. If the new Model Y+ strikes the right balance between price and performance, it could help Tesla regain some lost ground in the world’s most competitive EV market.
But catching up won’t be easy. Chinese automakers like XPeng XPEV and NIO Inc. NIO are offering models with comparable range at cheaper prices. The XPeng G6, for instance, offers up to 755 km of range at a starting price of about $32,900 — significantly cheaper than Tesla’s Y+. Nio’s Onvo L60, with up to 740 km of range on its 85-kWh model, is priced from around $29,300. With domestic players offering more for less, Tesla’s latest move may be a step forward — but it still has plenty of ground to cover in the world’s most competitive EV market.
The Zacks Rundown on TSLA Stock
Shares of Tesla have gained 6% year to date compared with the industry’s growth of 12%.
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From a valuation standpoint, TSLA trades at a forward price-to-sales ratio of 13.47, above the industry and its own five-year average. It carries a Value Score of D.
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See how the Zacks Consensus Estimate for TSLA’s earnings has been revised over the past 90 days.
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Tesla stock currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
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