Will the Long-Range Model Y+ Help Tesla Catch Up in China?

Once the undisputed electric vehicle (EV) leader in the world’s largest EV market, Tesla TSLA is now under pressure from homegrown rivals. As competition intensifies and price wars deepen, Tesla is hoping that its new variant— the Model Y+ — can ignite buyer interest and help it regain lost ground.

Tesla’s China Sales Struggle Amid Fierce Competition

Per CnEVPost, Tesla China sold 515,552 vehicles (including exports) from January to August, reflecting a 12.2% decline year over year. Still, there were signs of a rebound in August. During the month, Tesla’s local sales rose 41% month over month to 57,152 units, per the China Passenger Car Association, as cited by Teslarati. Its Giga Shanghai plant produced over 83,000 vehicles, making it the company’s strongest wholesale month so far this year.  

Much of Tesla’s growth in China this year has come from one vehicle — the Model Y. The compact SUV has been a hit with Chinese consumers, accounting for roughly 70% of Tesla’s local sales, and even ranking as the second-best-selling vehicle in China overall. Tesla China's August deliveries are also likely to have gotten a boost from the launch of the Model Y L, a long-wheelbase six-seater variant, to attract family-oriented buyers.

Nonetheless, even with the new variants and periodic discounts, Tesla’s deliveries in China remain under pressure amid competition and pricing war.

Model Y+: A Bid to Regain Traction

Tesla has now filed for approval of a new Model Y+ variant in China, according to a recent listing in the Ministry of Industry and Information Technology’s (MIIT) catalog. The new model is meant to help Tesla compete better in a market where buyers now care most about range and efficiency.

The Model Y+ will feature a 225 kW (302 hp) single-motor setup and use ternary batteries from LG Energy Solution, similar to the Model 3+ introduced earlier this year. Early filings suggest it could deliver around 800 kilometers (nearly 500 miles) of CLTC range, making it the longest-range Model Y in Tesla’s China lineup.

The Model Y+ is Tesla’s next big bet to stay relevant in China’s competitive EV landscape. This longer-range variant could inject fresh energy into Tesla’s offerings—but whether it’s enough to close the gap with local champions remains the big question.

Tesla’s China Rivals Log Strong Sales Gains

BYD Co Ltd BYDDY has taken the lead in terms of volume, while XPeng Inc. XPEV and NIO Inc. NIO are also drawing buyers rapidly.

In the third quarter of 2025, BYD delivered 582,500 pure EVs, up 31% year over year, maintaining its lead over Tesla for the fourth straight quarter. Tesla’s own global deliveries hit 497,099 units in the third quarter, up 7.4% year over year, but still behind BYD’s total.

NIO delivered 87,071 vehicles in the third quarter of 2025, marking a new quarterly record and increasing 40.8% year over year. The deliveries were within NIO’s projected range of 87,000-91,000 units.

In the third quarter of 2025, XPeng delivered 116,007 Smart EVs, which rose 149% year over year. For the first nine months of 2025, XPeng’s cumulative deliveries totaled 313,196 units, reflecting a 218% increase from the same period in 2024.

The Zacks Rundown for Tesla

Shares of Tesla have increased 72% over the past six months compared with the industry’s growth of 70%.

From a valuation standpoint, TSLA trades at a forward price-to-sales ratio of 13.81, way above the industry. It carries a Value Score of F.

See how the Zacks Consensus Estimate for TSLA’s earnings has been revised over the past 90 days.

Tesla stock currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

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This article originally published on Zacks Investment Research (zacks.com).

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