Tesla reportedly producing cheaper Model Y to boost sluggish sales in China

Group 1: Tesla's New Model Plans - Tesla plans to produce a low-cost version of its Model Y to address sluggish sales in China, with production costs expected to be at least 20% lower than the current version launched last year [1] - Mass production of the low-cost Model Y, codenamed "E41," is set to begin at Tesla's largest factory by output in 2026 [1][2] - The new Model Y will primarily target the Chinese market but will also be produced in Europe and North America [2] Group 2: Market Competition and Sales Performance - Tesla has experienced declining sales in China, its second-largest market, due to increased competition from local manufacturers like BYD [2] - The current starting price for Tesla's Model Y in China is $36,351, making it vulnerable to competition from lower-cost models such as Xiaomi's upcoming YU7 crossover, expected to be priced around $34,500 [3][6] - Tesla's market share in China's electric vehicle market fell to 10.4% last year from 11.7% the previous year [6] Group 3: Strategic Responses and Future Plans - Elon Musk has indicated that Tesla will introduce lower-cost models in the first half of 2025, aiming to enhance competitiveness [2] - Tesla is also planning to launch a six-seat variant of the Model Y later this year in China as part of its strategy to fend off competition [10]