Tesla to Launch Six-Seat Model Y in China by Late 2025

Tesla is set to produce a six-seat variant of its popular Model Y electric vehicle (EV) in China starting in late 2025. This move is part of the automaker’s strategy to enhance the appeal of its best-selling EV in the highly competitive Chinese market.

According to sources familiar with the matter, Tesla has instructed suppliers to prepare for a significant increase in Model Y production at its Shanghai factory. However, details on how Tesla plans to scale production at this plant remain unclear, especially as the company awaits approval to expand the facility on 70 hectares of former farmland.

Project “Juniper” and Market Competition:

The new six-seater Model Y variant is part of Tesla’s broader efforts to update the vehicle under a ” Juniper project.” Initially planned for release this year, the revamped Model Y with five seats is expected to launch in early 2025.

The six-seater version highlights Tesla’s response to growing competition from domestic Chinese automakers like Nio and Zeekr, who have introduced rival models to the market.

Market Performance and Expectations:

The Model Y continues to be a strong performer in China, holding the title of the best-selling car across all power types, with 207,800 units sold in the first half of 2024. Despite reducing its sales force in May as part of global layoffs, Tesla expects a boost in overall China sales in the third quarter, particularly driven by growth in smaller cities.

Strategic Considerations:

While Tesla offers a seven-seater Model Y in the United States, the company has opted for a six-seater variant in China due to concerns that the cramped third row would not appeal to Chinese consumers.

Introducing this new variant underscores Tesla’s ongoing efforts to adapt to local market preferences and fend off increasing competition in the rapidly growing Chinese EV market.