Tesla unveils much cheaper Model Y in China after months of bad press

[BEIJING] Tesla debuted a significantly cheaper version of its locally built Model Y sports utility vehicle in China as deliveries for June slipped amid concern a string of negative publicity may have soured consumer sentiment toward the electric-carmaking pioneer.

Wholesale shipments of China-made Teslas decreased 0.9 per cent last month to 33,155 from 33,463 in May, data from China's Passenger Car Association showed Thursday. May's figure was a surge of almost 30 per cent from April. The wholesale figures may not necessarily reflect the level of retail demand Tesla fields directly versus via traditional dealerships.

The so-called standard-range version of the Model Y crossover starts from US$42,600 after government subsidies and Tesla began taking orders on Thursday, according to its website. That's about 20 per cent less than the original longer-range Model Y, which can run for 594 kilometers on a single charge.

This latest version, which is available in Hong Kong but hasn't been sold in China before, can run for 525 kilometers and because it's priced under 300,000 yuan (S$62,522) is eligible for a particular state new-energy vehicle subsidy. Its price is only 10 per cent higher than Tesla's most-basic China-made Model 3 sedan and deliveries will start as soon as next month.

"China has the world-leading new-energy market and is the first market outside the US that Tesla owns a locally produced product," Tesla said in a statement. The company will "continue its investment in China and carry on its corporate mission of accelerating the world's transition to sustainable energy and helping to boost the realisation of a carbon-neutral target."

Tesla, which counts China as its second-most-important market after the US, has a history of repeatedly lowering the price of its cars, particularly around the start of a new quarter, in order to boost sales. However Thursday's launch is especially telling considering it comes after months of bad press in the world's biggest electric-car market.

This year alone, Tesla has battled everything from an angry driver protest that went viral at the Shanghai Auto Show in April to online criticism about its perceived arrogance and lack of customer service. The California-based company has also weathered upsets that have seen its cars banned from some military complexes over concern the vehicles' in-built cameras may be collecting sensitive data. Tesla immediately moved to reassure authorities, saying any data collected in China is stored locally.

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