China is Getting a Cheaper Tesla Model Y

Tesla has finally figured out how to compete with Chinese automakers—make a cheaper car. But not just any cheaper car—one that costs a full third less! There’s no magic trick involved here; the savings will come from removing some features, swapping others for plastic, and simply forgetting to include a few altogether.

According to multiple reports, Tesla is already working on a budget-friendly Model Y exclusively for the Chinese market, with production costs expected to be 20–30% lower than the current version. Shanghai’s Gigafactory is set to begin test production in the third quarter of this year, with mass production planned for late 2025 or early 2026, assuming everything goes according to plan (which, in Tesla’s case, rarely does).

A lower price tag most likely means fewer unnecessary luxuries, such as calling emergency services or having actual buttons and switches in the cabin. But who needs those anyway? The new budget Model Y will likely feature a battery sourced from BYD’s backyard and an infotainment screen that displays only two things: your speed and how fast the battery drains every time you step on the accelerator.

Tesla’s Struggles in China
Last year was a tough one for Tesla in China—despite some growth, the company still lost market share. In the EV segment, Tesla’s dominance shrank from 12% to 10%, as Chinese manufacturers continue flooding the market with cheaper, better-equipped electric cars.

And 2025 isn’t off to a great start either—Tesla’s sales in China dropped by 13.6% in January. But February? That was nothing short of a disaster. Tesla sold just 30,688 vehicles in China and for export—a 49.2% drop from last year and 51.5% lower than January.

The Model Y took the hardest hit, selling just 8,032 units, a staggering 77.8% decline! Meanwhile, 22,656 units of the Model 3 were sold, marking another 6% drop compared to previous figures.