Sales of Tesla Model Y in China drop again in July
In the rapidly evolving Chinese electric vehicle (EV) market, Tesla has been facing a challenge with the decline in sales of its Model Y since 2022. The reasons for this decline can be attributed to growing local competition and a shift in consumer preferences towards larger, family-friendly vehicles.
From January to July 2025, Model Y sales in China dropped by about 17.15% compared to the same period in the previous year. This trend is reflected in the Model Y's retail sales, which have declined year-on-year in five of the first seven months.
To counter this decline, Tesla is introducing a larger version of the Model Y called the Model Y L. This new variant features a longer wheelbase and a third row of seats, providing improved legroom and seating for six passengers. The Model Y L, about 7 inches longer with a stretched wheelbase of 119.7 inches, is expected to cater better to the preferences of Chinese consumers.
The Model Y L is set for an imminent launch, with deliveries expected to start in September 2025. Demonstrator vehicles have already been seen at showrooms and service centers, and mass production has started, indicating a near-term official release.
In addition to the Model Y L, the Model 3 has also seen a decline in sales in China. In the first seven months of the year, the Model 3 exported 70,718 units, down 42.00 percent year-on-year. However, the Model 3's retail sales in China totaled 101,770 units, up 26.54 percent year-on-year, showing some resilience.
The SUV segment, on the other hand, saw exports of 57,615 units from China, up 6.17 percent year-on-year. Tesla exported 15,072 Model Y vehicles from China in July, up 195.18 percent year-on-year and up 135.32 percent month-on-month.
The launch of the Model Y L and the continued sales of the Model 3 may help Tesla regain its footing in the Chinese market, where it faces intense competition and evolving consumer preferences. The introduction of larger, more practical EV models like the Model Y L is a strategic move to cater to this market and maintain Tesla's competitiveness.
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