Model Y priced under $40,000 launched in North America. Will the Chinese market follow suit? A person familiar with the matter: No news has been received yet.

On October 8th, Tesla launched “more affordable” models on its North American official website.

According to the official website information, two new models named “Standard Model Y” and “Standard Model 3” are priced at only $39,990 (approximately RMB 285,100) and $36,990 (approximately RMB 264,300) respectively.

Compared with the previous Model Y, which started at $44,990, the price of the former has dropped directly by $5,000 (approximately RMB 35,700), a decrease of 11.11%. The latter is $5,500 (approximately RMB 39,500) cheaper than the previous Model 3, which started at $42,490, with a decrease of 12.94%.

△ “Standard Model Y” and “Standard Model 3”. Source: Tesla's official website in the United States.

As of the time of publication by a reporter from Time Weekly, the launch of the above two “Standard Model Y” and “Standard Model 3” was not seen on Tesla's official website in China.

In response, a relevant person from Tesla told the reporter from Time Weekly: “Currently, we really haven't received this news (about the launch in China), and the relevant models haven't been put into production yet.”

What has been “downgraded” in the “more affordable” Tesla?

For the two “standard version” models with lower prices, as the price drops, the configuration has also been adjusted accordingly.

In terms of battery range, the range of the “Standard Model Y” has decreased from the previous 357 miles to 321 miles; the range of the “Standard Model 3” has decreased from 363 miles to 321 miles.

The “downgrade” in performance is also obvious. The previous version of the Model Y could accelerate from 0 to 100 km in just 5.4 seconds, while the “Standard Model Y” takes 6.8 seconds. Moreover, neither of the two new models is equipped with Tesla's proud Autopilot advanced driver - assistance system, and only comes with a Traffic - Aware Cruise Control system.

Despite the “configuration reduction”, some industry insiders pointed out that if the price cut in North America is applied, once the two models are launched in the domestic market, they will still have certain market competitiveness.

Zhang Xiang, the secretary - general of the International Association of Intelligent Vehicle Technology, predicted in an interview with the reporter from Time Weekly: “It's highly likely that Tesla's two ‘standard version’ models will be introduced into the domestic market after completing technical debugging and ensuring the maturity of all aspects of technology. Currently, the specific time of their launch in China is uncertain.”

On the eve of the launch of the new models, Tesla released its global production and delivery report for the third quarter of 2025. The data shows that in the third quarter, Tesla produced approximately 447,000 pure - electric vehicles globally and delivered over 497,000 vehicles, higher than the analysts' previous expectation of 448,000 vehicles, a year - on - year increase of 7.4%.

Focusing on the Chinese market, Tesla sold 169,200 vehicles in the third quarter, including 71,000 vehicles in September, a month - on - month increase of 25%. Some industry insiders analyzed that the price adjustment strategy and the upcoming expiration of the purchase tax exemption for new energy vehicles in China in 2026 are important factors contributing to its sales growth in the Chinese market.

Who needs the “affordable” Tesla more?

Zhang Xiang told the reporter from Time Weekly, “China is one of Tesla's most important global markets. From the demand side, for Tesla, only by maximizing sales can it achieve economies of scale - by spreading the costs of R & D, management, production, and marketing across a larger volume of sales, and ultimately achieve a higher level of profitability. For domestic consumers, the entry of Tesla models in the RMB 200,000 price range into the Chinese market will provide more diverse car - buying options.”

Zhang Xiang further analyzed, “The automotive market has a typical ‘pyramid - shaped’ characteristic. That is, the top of the pyramid consists of higher - priced models, while the middle and bottom are made up of mid - to - low - priced models. Currently, the RMB 200,000 price range is the main consumption segment in the domestic automotive market. Introducing these models into China, Tesla can not only cover a wider market scope and consumer group, but also its sales potential may exceed that of its high - end models.”

Data provided by Sang Zhiwei, an analyst in the automotive circulation industry and a member of the Expert Committee of the China Automobile Dealers Association, shows that in the first quarter of 2025, the sales volume in the RMB 200,000 - 250,000 price range was about 445,000 vehicles, a year - on - year increase of 30.5%. This market is the most competitive niche market, where domestic brands compete with joint - venture brands, traditional fuel vehicles compete with new energy vehicles, and domestic mid - to - high - end new energy models compete with traditional luxury brand models. It is also the first price - range market where the sales volume of new energy vehicles exceeds that of fuel vehicles.

Sang Zhiwei mentioned that in the RMB 200,000 - 250,000 price range, the new - car sales of the three niche models of mid - size SUVs, mid - size sedans, and large - mid - size sedans are all around 21%. When the price ranges, niche models, sedan and SUV models, and domestic new - force mid - to - high - end models overlap with traditional luxury brand models, it means that the market competition is extremely fierce.

Another set of data from the China Passenger Car Association shows that in August 2025, the penetration rate of new energy vehicles of domestic brands reached 66.2%. There are also quite a few direct competitors for the “Standard Model Y” and “Standard Model 3”. The former is surrounded by the LeDao L90, Xiaomi YU7, and XPeng G7, while the latter has to compete with models such as the Xiaomi SU7 and XPeng P7 for market share.

Zhang Xiang told the reporter from Time Weekly that currently, Tesla has problems such as a relatively thin model matrix and a slow pace of technological updates, which are gradually weakening its advantages in the increasingly competitive Chinese market. “This is also the main reason why although Tesla's sales volume still maintains a steady growth, its growth rate and market share have been continuously declining, and the growth rate has lagged behind the overall growth rate of the domestic automotive industry.”

According to data from the China Passenger Car Association, from 2021 to 2024, Tesla's annual sales in China were 320,700, 439,800, 603,700, and 657,100 vehicles respectively, showing a steady increase, but the growth rate has significantly slowed down. The growth rate in 2022 was about 37.14%, and in 2023 it was about 37.27%, basically the same as in 2022. However, in 2024, the growth rate dropped significantly to 8.83%.

From January to August this year, Tesla's cumulative sales in China were about 361,000 vehicles, a year - on - year decrease of 6.9%, and its market share was 4.8%, a decrease of 1.7 percentage points compared with 6.5% in the same period last year.

△ Tesla Model Y. Source: Tesla's official website in China.

In order to boost sales, Tesla China has also been continuously making adjustments in terms of products, prices, and other aspects.

On February 25th, Tesla announced that it would launch the Urban Autopilot advanced driver - assistance system for users who order the FSD (Full Self - Driving) advanced driver - assistance system. However, this update, regarded as the “Chinese version of FSD”, has been criticized by many car owners for “almost zero localization” due to issues such as running red lights and changing lanes across solid lines during actual operation.

Compared with attracting customers through technology, price cuts are more direct.

Since 2023, the price of the rear - wheel - drive version of the Tesla Model Y has dropped from RMB 316,900 to RMB 263,900. In addition, Tesla has also introduced new referral rewards and financial policies.

Tesla's official website shows that if you place an order through the referral reward program before October 31st (inclusive), you can enjoy a RMB 8,000 paint - selection bonus. If you place an order for a specified version of the model before October 31st (inclusive), you can apply for a limited - time 5 - year zero - interest financial plan. Among them, for the Tesla Model 3, consumers who purchase the cooperative insurance can also enjoy a limited - time insurance subsidy of RMB 8,000.

In addition, in September just passed, Tesla also launched the new model Model Y L, which is regarded as an attempt to “save the sales in the Chinese market”. A series of actions indicate that Tesla is using a “combination punch” of “price + product” to cope with the fierce competition in the Chinese new energy market.

This article is from the WeChat official account “Time Weekly” (ID: timeweekly). Author: Cao Yang. Republished by 36Kr with permission.