NIO, Xpeng and Li Auto need not fear euphoric demand for Tesla’s cheaper Model Y, analysts say

NIO, Xpeng and Li Auto, China’s three home-grown Tesla challengers, will maintain a high-growth trajectory despite the launch of a cheaper version of its Model Y by the US carmaker, analysts said.

The euphoria around the new standard range Model Y, which was launched on July 8 and has a cheaper price tag of 276,000 yuan (US$42,570), had stoked fears about the future of the Chinese carmakers, which lag far behind Tesla in terms of deliveries. Local media reported that the new version received 10,000 orders on the first day, followed by another 50,000 orders the next day. The buyers will, however, have to wait until September to receive their standard range Model Ys, said the sales manager at Tesla’s showroom at HKRI Taikoo Hui shopping centre in Shanghai.

“The worries might have been overblown,” said Gao Shen, an independent analyst in Shanghai. “China’s EV market is no longer a zero-sum game.”

The new Model Y sport-utility vehicle (SUV) can go 525km on a single charge and has been priced to take advantage of a government subsidy scheme – Beijing offers cash subsidies to buyers of EVs priced below 300,000 yuan. It is 71,900 yuan cheaper than the long range version, whose range stands at 595km. Its price tag has attracted thousands of mainland Chinese drivers keen on an EV with autonomous driving features and voice-activated controls.