Tesla is becoming like Arc'teryx.

Recently, I came up with a term, "Arc'teryx-ization". It refers to a situation where when the social and identity - recognition value of a brand's logo completely overwhelms or even replaces the functional value of the product itself, the brand will no longer focus on innovation and breakthroughs. Instead, it will tend to lower the threshold and sell the logo. Such a brand has undergone "Arc'teryx-ization".

These kinds of brands usually establish themselves in the professional field with top - notch technology and innovation in the early stage. Taking Arc'teryx as an example, it was initially famous for its seat belts using heat - pressing technology, hard - shell jackets made of GORE - TEX fabric, and for being the first to invent waterproof zippers. It built a reputation as "life - saving equipment" in the professional outdoor circle.

However, after breaking into the mainstream market, the core value of the brand is redefined. The brand is shaped by new customers as a symbol of social status. At this time, the logo replaces the product itself and becomes social currency and a "middle - class ID card". Consumers are no longer buying the product but just the logo printed on the clothes. Meanwhile, to boost sales, the brand also launches more "daily" product lines and no longer focuses on pursuing extreme technological innovation. After all, at this point, the performance doesn't matter much. As long as there is a logo on it, the product can be sold.

From this perspective, Tesla is undergoing "Arc'teryx-ization". The most obvious sign is that recently Tesla launched the affordable Model 3 Standard and Model Y Standard. In terms of technical performance, these two models have reduced configurations compared with the previous rear - wheel - drive long - range and high - end rear - wheel - drive versions. However, the prices have also dropped. In the US market, the starting prices are $36,990 and $39,990 respectively, a significant reduction of $5,000 - $5,500, more than a 10% decrease.

Looking at the bright side, this is Tesla's positive response to market demand. But on a deeper level, it seems more like a "logo - selling volume - boosting strategy" of the former tech giant in the increasingly fierce competition in the new - energy vehicle market: Since it can no longer create a technological gap, but still has the "first - mover advantage" in consumers' minds, it simply reduces the configuration, lowers the price, slaps on the logo, and harvests more potential consumers who believe in the brand.

The two models are currently only available for release and sale in the US market. According to the plan, overseas deliveries will start within October. In fact, although Tesla's affordable models still have some competitiveness in the overseas market at the same price range, they can hardly pose an advantage over major Chinese brands in the Chinese market. Tesla is gradually losing its technological edge in China and is starting to slide towards becoming an "Arc'teryx - style" enterprise relying on brand premium.

This change reflects the profound transformation of the global new - energy vehicle industry landscape.

01

Tesla has significantly streamlined the configurations of the affordable models it launched this time.

The cruising range of the Model 3 Standard has decreased from 358 miles to 272 miles compared with the previous version. The Model Y Standard's cruising range has dropped from 357 miles to 321 miles. At the same time, the panoramic glass sunroof has been removed, the number of speakers has been reduced by more than half, and the steering wheel adjustment has changed from electric to manual.

Behind this "configuration - reduction and price - cut" strategy is the severe market pressure Tesla is facing. According to the latest data, Tesla's global deliveries in the first half of 2025 were 720,000 vehicles, a year - on - year decline of 13.3%. This decline far exceeded market expectations and was also the first significant year - on - year drop since 2022.

What's even more severe is that Tesla is facing challenges of varying degrees in major global markets. In the European market, according to data from the European Automobile Manufacturers Association, BYD's new - car registrations in the European market reached 13,503 vehicles in July 2025, a year - on - year increase of 225%. Its market share rose to 1.2%, surpassing Tesla's 0.8% for the first time.

In the Southeast Asian market, BYD's sales exceeded Tesla's in countries such as Singapore, Thailand, and Malaysia in August 2025.

In the most crucial Chinese market, Tesla is under unprecedented competitive pressure.

Tesla's cumulative sales in the Chinese market in the first half of 2025 were 263,400 vehicles, a 5.4% decrease compared with the same period in 2024. Its market share has shrunk from a peak of 15% in 2020 to 7.6%.

In sharp contrast, Chinese new - energy vehicle manufacturers have shown strong performance. BYD has outperformed Tesla in global pure - electric vehicle sales for the fourth consecutive quarter. In the third quarter, its pure - electric vehicle sales reached 582,522 vehicles, leading Tesla by 85,423 vehicles. In terms of global market share, BYD has been the world's best - selling electric vehicle brand for three consecutive quarters. In the second quarter of 2025, its market share reached 22%, with sales exceeding 850,000 vehicles, a year - on - year increase of 15%.

The performance of new - force brands has also been remarkable. In September 2025, Leapmotor ranked first among new - force brands with 66,657 vehicle deliveries. XPeng Motors exceeded 40,000 monthly sales for the first time, and Xiaomi Auto also achieved a delivery of over 40,000 vehicles, rewriting the competition pattern among new - force brands. These data indicate that the Chinese new - energy vehicle market has entered a stage of diversified competition, and Tesla's dominance has come to an end.

Comparison of data in the Chinese electric vehicle market

Behind this change is an obvious contrast in "cost - performance".

When comparing Tesla's affordable models with domestic models in the same price range, the gap in cost - performance is evident. In the 200,000 - 250,000 yuan price range, Chinese brands often offer extremely rich configurations such as seat ventilation and massage, air suspension, and 800V fast charging.

In contrast, the affordable Model Y/3 has relatively simple configurations. Specifically, the standard version of the affordable Model Y shows particularly obvious configuration streamlining: the rear - seat touchscreen has been removed, the number of speakers has been reduced from 14 to 6, the steering wheel adjustment has changed from electric to manual, and the panoramic glass sunroof has been removed.

In today's era of more diversified and localized electric - vehicle demand, in addition to basic assisted - driving functions, more and more users are starting to pursue comfortable and diverse experiences. Such a significant reduction in configuration undoubtedly creates a huge gap for Chinese users.

More importantly, Tesla's proud FSD (Full Self - Driving) function still doesn't work well in China. Although Elon Musk has repeatedly promised that FSD will be launched in China, from the initial end of 2024 to the first quarter of 2025, due to complex factors such as data compliance, algorithm localization, and regulatory approval, the launch time of this core function remains uncertain.

In contrast, Chinese automakers have achieved large - scale commercial application in the field of intelligent driving. XPeng Motors' XNGP intelligent assisted - driving system has achieved map - less intelligent driving in many cities across the country, covering scenarios such as highways, urban expressways, and urban roads. Li Auto's AD Max intelligent driving system performs well in the urban NOA function.

This makes it difficult for Tesla to establish a fundamental gap with its competitors in the same price range in terms of local intelligent - driving experience.

02

Although in terms of technology and performance, Tesla can hardly claim an absolute advantage or even an advantage, it still holds a high position in consumers' minds in terms of brand.

After all, as the pioneer of new - energy vehicles, Tesla has become a "tech symbol" in the public's mind, a perfect combination of cutting - edge technology, unique brand charm, and a closed - loop ecosystem. As a result, it has enjoyed a high brand premium. When it entered the Chinese market in 2014, the starting price of the imported Model S was 734,000 yuan (including tax and on - road price), and the top - of - the - line model cost over 1 million yuan. In early 2019, when the Tesla Model 3 was sold in China as an imported car, the starting price of the standard - range version was close to 430,000 yuan, and the high - end long - range and performance versions cost over 500,000 yuan.

These impressions are still deeply ingrained in consumers' minds. Ordinary consumers may not understand the technology and parameters of Tesla's products, but they still accept the perception of it as "high - end" and "technological". In other words, as long as they see the Tesla logo, they will think it is still an "advanced" product, representing an environmentally friendly and technological lifestyle and a set of values.

Therefore, launching the affordable Model 3 Standard and Model Y Standard is a "wise" business strategy.

On the one hand, by attracting users with a "Tesla complex", Tesla can indeed accurately intercept potential customers of domestic cars. These users often have a strong identification with the Tesla brand and are willing to pay for the brand value. Even with the reduced configuration, they still choose Tesla. At the same time, for consumers who value battery efficiency and the minimalist design concept, Tesla's product philosophy still has some appeal. They don't care much about the configuration, or they think that "color TVs, sofas, and refrigerators" in cars are unnecessary.

On the other hand, it directly squeezes the market space of second - tier new - force brands with weak brand power and thin profit margins (such as Hozon and Leapmotor). These brands originally relied on the cost - performance advantage to survive in the entry - level market. However, the entry of Tesla's affordable models, with its stronger brand appeal and global supply - chain advantage, poses a direct threat to their market space.

No matter how strong the performance and high the configuration of domestic brands are, many consumers who are keen on social media still won't recognize them. However, the high - end narrative formed by the aura around Tesla and Elon Musk is still widely spread on social media. This subjective preference creates an "arbitrage space" objectively: just launch products in an "affordable" price range, slap on the logo.

Yes, this "arbitrage space" is more reflected in the brand level rather than the technological innovation level. Tesla's core technological advantages are being rapidly caught up with and even surpassed by Chinese enterprises. In terms of the three - electric system, technological solutions such as BYD's Blade Battery + e - Platform 3.0, NIO's 900V all - domain system, and Xiaomi's 870V silicon - carbide platform have approached or even partially exceeded Tesla in key indicators such as energy efficiency, charging speed, and thermal management.

Comparison of battery technologies between BYD and Tesla

From a technical perspective, Tesla's monopoly in battery technology has been completely broken. Thanks to the safety and cost advantages of lithium - iron - phosphate materials, BYD's Blade Battery is not only widely used in its own models but also adopted by many other enterprises such as NIO, XPeng, and Xiaomi.

In terms of power - system integration, Chinese enterprises have also demonstrated strong technical strength. BYD's e - Platform 3.0 highly integrates the electric drive, battery, and electronic control systems, achieving higher energy density and lower manufacturing costs. The front - and - rear dual - motor systems of NIO's ET5 and ET7 have outperformed Tesla's models in the same class in terms of performance.

In terms of charging technology, Chinese automakers' 800V+ ultra - fast charging technology has achieved large - scale application. This technology route is significantly more efficient than Tesla's 400V architecture. XPeng Motors' 800V high - voltage platform, combined with its S4 ultra - fast charging piles, can reach a charging power of 480kW, reducing the charging time from 10% to 80% to less than 20 minutes.

NIO's 900V all - domain charging and battery - swapping system, combined with its unique battery - swapping technology, provides users with more flexible energy - replenishment options. Xiaomi's 870V silicon - carbide platform has more advanced applications in materials science, further improving system efficiency.

With the loss of the FSD trump card and the gradual catch - up of domestic automakers in the three - electric technology, Tesla's technological advantages in China have basically disappeared.

However, a brand is ultimately a subjective judgment based on objective reality. For a long time to come, in the minds of many consumers, Tesla will still have the image of being "leading" and "high - end".

Just like many consumers who buy Arc'teryx, they don't bother to understand the performance, materials, uses of the products, or the differences between Arc'teryx and other brands. Even if all brands use the same GORE - TEX fabric and laminating technology, they still prefer Arc'teryx. It's just that the relatively high price forces them to choose other brands.

Therefore, the simplest and most direct way to regain market share is to launch a new low - end product line, reduce the configuration, and cover a larger market, even the sinking market where people care more about face and the logo.

This is what Tesla is currently doing. After the early technological first - mover advantage gradually fades, it starts to rely more on brand value and user inertia rather than continuous technological leadership to maintain its market position. Since it can maintain high profits through brand premium, it might as well launch an affordable product line and "sink" into the market.

03

The fundamental reason why Tesla has fallen from its former position as an industry disruptor to its current predicament is that it can hardly compete with domestic automakers in terms of supply chain, cost, and iteration speed.

Although Tesla has built a Gigafactory in Shanghai with more than 400 local first - tier suppliers, its product definition, R & D rhythm, and supply - chain decisions are still highly restricted by its US headquarters, making it difficult to quickly respond to changes in the Chinese market.

This "headquarters - decision, local - execution" model may have been effective in the early stage of new - energy vehicle development, but it has become a heavy burden in the current rapidly iterating market environment.

Chinese consumers' demands for intelligent cockpits, assisted driving, and in - vehicle ecosystems are constantly changing. However, Tesla's product - update cycle is relatively slow, often requiring multiple levels of approval from the US headquarters and global unified considerations.

In contrast, Chinese automakers such as BYD, Xiaomi, and XPeng have shown different market - adaptation capabilities. These enterprises are rooted in the world's most concentrated new - energy vehicle industrial chain - the Yangtze River Delta and the Pearl River Delta regions. More than 90% of their core components, from batteries, motors, and electronic controls to intelligent cockpits and lidars, can be localized, modularized, and rapidly iterated.