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July 8, 2021, 7:11 a.m. EDT

Tesla releases a cheaper Model Y in its battleground China market

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By Barbara Kollmeyer

Electric-car maker Tesla may be hoping to erase some difficult months in China with the release of a cheaper Model Y.

The auto maker /zigman2/quotes/203558040/composite TSLA +0.33% on Thursday unveiled the Standard Range (SR) Model Y on its China website that has a starting price of ¥276,000 ($42,589), which takes in government subsidies and reduces it from ¥291,840. Delivery of the autos will begin in August, according to the website.

Tesla’s original Model Y for its Chinese market was approved for sale in late 2020, with the lowest price at ¥347,900 ($53,700).

The new version will allow buyers to take advantage of China government subsidies on electric-vehicle purchases, which only apply to those priced under ¥300,000. Plans to scrap those subsidies were shelved as the pandemic hit and the government sought to stimulate sales of electric cars.

China is a key market for electric-car makers, and Tesla faces plenty of homegrown competition, including NIO /zigman2/quotes/204905836/composite NIO +1.13% , XPeng  /zigman2/quotes/219982686/composite XPEV +3.78% and BYD /zigman2/quotes/206867707/delayed HK:1211 +3.37% . Concerns about sales in that country and some public-relations headaches — backlash over its handling of consumer complaints and a recall that stoked more concerns — are at the heart of weakness for the stock this year, say some analysts.

Shares of Tesla have lost around 9% so far this year, against a 14% gain for the Nasdaq Composite and near 15% rise for the S&P 500. On Thursday, shares were down over 2% in premarket trade, against the backdrop of broader global market weakness .

Ahead of the July 4 holiday, Tesla said it produced  206,421 vehicles and delivered 201,250 in the second quarter,  roughly in line with broader analyst consensus and a record for the company. In April, it reported blowout sales, and cited a strong performance of the China Model Y .

Read: Tesla’s sales show company is weathering chips shortage better than other auto makers

Tesla is scheduled to announced its second-quarter earnings on August 4.

/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 759.49
+2.50 +0.33%
Volume: 28.20M
Sept. 17, 2021 4:00p
P/E Ratio
395.75
Dividend Yield
N/A
Market Cap
$749.43 billion
Rev. per Employee
$445,694
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/zigman2/quotes/204905836/composite
US : U.S.: NYSE
$ 37.51
+0.42 +1.13%
Volume: 29.62M
Sept. 17, 2021 4:02p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$60.77 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/219982686/composite
US : U.S.: NYSE
$ 39.01
+1.42 +3.78%
Volume: 11.16M
Sept. 17, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$31.55 billion
Rev. per Employee
$166,548
loading...
/zigman2/quotes/206867707/delayed
HK : Hong Kong
$ 257.40
+8.40 +3.37%
Volume: 9.66M
Sept. 17, 2021 4:08p
P/E Ratio
167.95
Dividend Yield
0.07%
Market Cap
$810.65 billion
Rev. per Employee
$768,847
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