SHANGHAI (Reuters) – Tesla plans to produce a six-seater version of its Model Y car in China starting in late 2025, two people familiar with the matter said, as the U.S. automaker strives to boost the appeal of its best-selling but aging electric vehicle.
Tesla has asked its suppliers to prepare for a double-digit increase in Model Y production at the company’s Shanghai factory, said one of the sources, who declined to be named because the plan is not public.
Tesla did not immediately respond to a request for comment.
It was not clear how the US group would increase production at the Shanghai plant, which is still awaiting permission to expand onto 70 hectares of former farmland.
Tesla has already recorded a 6% year-on-year increase in Model 3 deliveries at home and abroad between January and June, helped by the launch of a refreshed version in 2023.
The Model Y car, which launched in 2020, has since been updated under a project called “Juniper,” Reuters previously reported. A new five-seater version will launch in early 2025 rather than this year as originally planned, a second source said.
The addition of a six-seater version reflects the pressure on Tesla from its local rivals in China, while in the United States the American group is focusing on autonomous driving and robo-taxis.
Chinese automakers have unveiled at least four Model Y competitors this year, including Nio’s Onvo L60 and Zeekr’s 7X, with roomier interiors and lower prices than the flagship models.
The Model Y remains the best-selling car in China across all engine types, with sales of 207,800 vehicles from January to June, although BYD’s Seagull sedan is closing the gap in second place.
Tesla also expects its overall sales in China to rise in the third quarter, driven by strong growth in smaller cities, even as the automaker cut its sales force as part of global layoffs in May, which should help improve profitability.
Sales could also be boosted by the introduction of the full self-driving (FSD) function planned in China by the end of the year.
Tesla sells a seven-seat Model Y in the United States, but a cramped third row would not be popular in China, the sources said.
“It’s not even big enough for a big dog,” one source said.
(Reporting by Zhang Yan and Casey Hall; Editing by Blandine Hénault; Editing by Diana Mandiá)
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