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Elon Musk is ready to take the fight once more to China with the launch of Tesla’s (TSLA) new Model Y L car.
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The EV maker, which has spluttered in the ever-competitive Chinese market this year, promised that the new vehicle was “coming soon,” according to a report on Reuters. Tesla shares rose 0.6%.
Best Seller
The declaration was said to have been made on Chinese social media platform Weibo (WB) today. Tesla also shared a video of the new model, which is a six-seat version of its best-selling Model Y.
Tesla, led by chief executive Musk, is hoping that the car will help refresh its line-up and help beat off rivals such as Chinese EV maker Xiaomi (XIACF) and its electric YU7 SUV. It was launched to much excitement in June.
So much so that Xiaomi said it received 200,000 orders in just three minutes after launch. It is priced at around $35,000, making it 4% cheaper than Tesla’s rival Model Y in China.
It also boasts a top range of 835 km, leaving the Model Y with its 719 km reach way behind in its rear-view mirrors. It can also accelerate from zero to 62mph in just 3.23 seconds.
China Crisis
This focus on performance and price has hit Tesla hard in China. It registered an 8.4% fall in July sales of its China-made electric vehicles to 67,886 units. This marked the sixth month out of seven this year where Tesla’s Shanghai shipments have seen a decline, reflecting the mounting pressure Tesla faces in the world’s largest EV market.
This is important given that a fifth of total Tesla revenue comes from China.
It’s not only the price war which has knocked Tesla off course in China and elsewhere around the globe this year. Musk’s involvement with the Trump administration and his flirtation with right-wing politics has also knocked the company’s brand reputation.
Tesla hopes the new Model Y will help spark a renaissance. In addition, a longer-range, rear-wheel drive Model 3 is also reportedly coming to the Chinese market.
Is TSLA a Good Stock to Buy Now?
On TipRanks, TSLA has a Hold consensus based on 14 Buy, 15 Hold and 8 Sell ratings. Its highest price target is $500. TSLA stock’s consensus price target is $307.23, implying a 7.70% downside.
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