The budget version of the Model Y can't save Tesla.

Tesla, which hadn't launched new products for years, suddenly started to stir up a storm.

According to the latest news, Tesla is about to launch two revamped products to enter more niche markets: The first is the PLUS version - Model YL. This is an "enlarged" Model Y, with an additional "L" in its name. Both the body and wheelbase have been lengthened, and it has changed from a five - seater to a large six - seater. The goal is to capture the family car market, competing with brands like Li Auto and AITO.

The second is the "affordable version" of the Model Y, which has also received the most attention. To bring down the price, Tesla has made some "subtractions": for example, the super - cool panoramic glass roof, the small rear - seat screen, and some fancy lights may be gone, and the seats have been replaced with more practical fabric materials. The driving range will also be slightly shorter.

If the Model YL is more about entering the niche market of large six - seaters in China, the affordable "Model Y" is expected by the outside world to turn the current situation around for Tesla.

Why has Tesla changed its approach from being "less but better" to continuously launching new products? Can these strategies "save" Tesla?

01 Poor Sales and Formidable Competitors at the Doorstep

Imagine a top - student who always gets first place suddenly seeing a decline in grades. This is the dilemma Tesla is facing.

In the second quarter of this year, Tesla sold 384,000 vehicles globally, a decrease of more than 13% compared to the same period last year. This means that the number of people buying Tesla cars has actually decreased.

Key data from Tesla's Q2 2025 earnings report | Image source: Tesla

Selling cars is Tesla's main source of income (accounting for 75% of the total revenue). With fewer cars sold, Tesla naturally earns less money. The total revenue in the second quarter ($22.5 billion) dropped by another 12% compared to the same period last year.

Although Tesla's brand is still well - known, there are real problems with its sales volume and profits. This is the fundamental reason why Tesla is "stirring up a storm" - it needs a victory to reverse the decline.

What's more serious is that Tesla's troubles are not limited to one area. It has encountered strong competitors and obstacles on its global battlefield.

In the United States, the government used to offer a $7,500 (about 50,000+ RMB) "super discount coupon" (tax credit) to encourage people to buy electric vehicles, which increased Tesla's appeal. However, this discount coupon is about to expire (it lasts until the end of September). Once the government subsidy is gone, it will surely dampen people's enthusiasm for buying. As the leader in the US new - energy vehicle market, Tesla will bear the brunt.

In the European market, domestic brands like BYD are rising strongly. In April this year, BYD's car sales in Europe officially exceeded those of Tesla. You should know that BYD cars sold in Europe are subject to a high tariff of 27.4%.

Facing the continuous decline in sales since 2025, the "defeat" in the European market, and the fierce encirclement by Chinese competitors, Wall Street and countless "believers" are pinning their hopes on more car models, including the affordable Model Y and the six - seat Model Y.

Hearing this, you may recall a saying often used by Elon Musk: "Tesla is not a car company; it is an AI company!" He always hopes that people will focus on more future - oriented things, such as Robotaxi and humanoid robots.

These dreams are indeed cool and sci - fi. But the problem is, dreams cost money!

Researching robots and training AI models are both "money - guzzling beasts". Before these future - oriented businesses can make money on their own, Tesla must rely on car sales, its "cash cow", to provide funds and support all its grand dreams.

02 The Affordable Model Y Can't Save Tesla

Can launching revamped models save Tesla?

To discuss this issue, we must first return to a fundamental question: How did Tesla achieve success in the first place?

Tesla's success is not just because it does well in battery, motor, and electronic control. Its greatest strength is creating an image of a "technology pioneer" for itself. For a long time, in the minds of many people: smart electric vehicles = Tesla.

The Model S/X is a bit like the iPhone 4 in the automotive world, emerging suddenly and directly defining what a "luxury electric vehicle" is; the Model 3/Y brought this unprecedented experience to more middle - class families.

This is why, even in the Chinese market, where various competitors have launched numerous "encirclements" against Tesla and have already surpassed it in terms of space, configuration, and interior luxury, the Model Y still holds the top position in sales. Because competitors are selling cars, while Tesla is selling its "brand" and winning the hearts of users.

However, the emergence of the affordable Model Y may dilute this hard - won brand value. Tesla's brand value is built on being "different". Driving a Tesla means embracing the future and being unique. But when a "basic" Model Y with a removed panoramic sunroof, ordinary interior, and mediocre performance appears, this uniqueness is diluted. Tesla is no longer providing users with the best experience; it has become an ordinary means of transportation with a Tesla logo.

More importantly, it will break the consumers' consensus that "Tesla = high - end". Once Tesla is dragged into a pure "cost - performance" battle with Chinese brands like BYD, Geely, and XPeng, the moat it has built over the long term will quickly collapse.

When Tesla stops leading the market by launching revolutionary technologies and disruptive products and instead starts to "cut costs and make subtractions" on old models, it is actually admitting to the world that its innovation engine is running out of steam.

Since the Model Y, Tesla's main models have not had any disruptive updates for several years. While Chinese competitors are making great progress in areas such as 800V high - voltage fast charging, assisted driving, cockpit experience, and exterior and interior design, Tesla, the former top - student, has chosen the easiest option - making subtractions.

In the future, the affordable Model Y will never be able to save Tesla. It may attract some users with its low price in the short term and make the sales figures on the financial report look better. But this is like drinking poison to quench thirst, causing long - term damage. For Tesla, the real growth engine should always be continuous innovation and an irreplaceable optimal experience.

03 Tesla Is Not the "Apple" of the Automotive Industry

For a long time, Tesla has given the impression of being "less but better". Just like Apple, it doesn't rely on a large number of models but uses a few highly disruptive products, such as the Model 3 and Model Y, to define the entire smart electric vehicle market.

However, why do Tesla and Apple, with seemingly similar strategies, achieve such different results? Why can Apple stay at the top of the profit list, while Tesla shows signs of fatigue in the fierce competition?

The answer lies deep in their respective "moats". Apple's core moat is its closed ecosystem of "hardware + software + services". The iPhone, iOS, App Store, iCloud, Apple Pay, etc., together create a powerful network effect. Once users enter this ecosystem, the cost of switching is extremely high, ensuring high user loyalty and profit margins.

Now let's look at Tesla. It has also been working hard to build its own ecosystem: a self - developed in - car system, FSD autonomous driving, and a global super - charging network. This provided a huge advantage in the early stage.

However, cars run on public roads and need to interact with various charging piles, insurance companies, repair shops, and regulatory standards. Tesla cannot build a completely closed "system" like Apple. Its user stickiness is far from being as strong as Apple's "walled garden".

Due to the different ecosystems, their ways of making money are also very different. The amazing thing about Apple's profit is that selling the iPhone is just the first step. Next, the commissions from the App Store, iCloud storage, Apple Music subscriptions, Apple TV+, etc., are a continuous stream of highly profitable service - based "cash cows". Hardware is the ticket, and services are the real feast.

In contrast, the vast majority of Tesla's profits still come from selling cars, which is a one - time deal. Although Elon Musk has high hopes for FSD (Full Self - Driving), despite its high price, it is still a "futures" product (beta version) and cannot serve as a stable and reliable continuous source of income.

This means that once the competition in the automotive market intensifies and a "price war" breaks out, Tesla's profit margin on the whole vehicle will be continuously squeezed, and its profitability will inevitably be affected. It lacks a stable "second growth curve" like Apple.

Facing the real - world dilemma of declining sales and encirclement by competitors, Tesla's series of actions are more like a "tactical defense" under pressure rather than a confident "strategic offensive". This may result in a good sales report in the short term and temporarily relieve the outside world's anxiety.

However, what can truly save Tesla will never be a cheaper Tesla but a Tesla that provides users with the best experience.

This article is from the WeChat official account "GeekPark". Author: Zhou Yongliang. Republished by 36Kr with permission.