Tesla to deliver China-made Model Y SUVs this month

The Shanghai plant is part of automaker’s plans to strengthen its presence in the world’s largest EV market

Tesla delivered 15 China-built Model 3 sedans to its employees in Shanghai in December 2019. Bloomberg

Tesla said on Friday it has started selling China-made Model Y sport-utility vehicles and will deliver them to customers this month, as the US electric vehicle maker expands sales in the world's biggest car market.

China, which offers hefty subsidies for electric vehicles as it seeks to cut down on pollution from petrol or diesel cars, is key to Tesla's global strategy. It is expanding its Shanghai car factory, where it also builds its Model 3 sedans.

In October, it started exporting Model 3 vehicles to Europe.

It is also adding manufacturing capacity for EV chargers in Shanghai and expanding its sales and service network around the country. It sold over 20,000 vehicles in November.

The starting price of a Model Y in China is now $52,091.95, according to its China website.

Tesla's rivals in China include Volkswagen, BMW as well as local start-ups such as Nio, Xpeng, and Li Auto, which all have electric SUV models.

The Shanghai plant is part of Tesla’s plans to strengthen its presence in the world’s largest EV market and lessen the impact of the US-China trade war.

The Covid-19 pandemic has increased the focus on the future of cars. With Tesla joining the S&P 500 index last month, some industry analysts say EVs are set to dominate the global auto market. President-elect Joe Biden’s triumph in the US elections and China announcing plans to boost the sector have propelled the industry.

Among EV manufacturers, Tesla continued as market leader in 2019, with 370,000 units sold globally and a market share of about 16 per cent, from 12 per cent in 2018, according to McKinsey’s EV index.

In October, Tesla said it is on track to deliver 500,000 cars in 2020, a 36 per cent increase from 2019, despite weaker sales in the rest of the global auto industry.