Original by New Energy Outlook (ID: xinnengyuanqianzhan)

In today's market where the "sea of cars" strategy has become a must-have tactic for new energy automakers, Tesla stands out as the brand that dares to go against the grain and has succeeded in doing so, earning the envy of its peers.

With just one Model Y, Tesla has raked in substantial profits, establishing itself as one of the most profitable new energy automakers. The Model Y has seamlessly secured its position as the top-selling model in the global new energy market and across the entire automotive industry.

Data from the China Passenger Car Association (CPCA) shows that Tesla Model Y sold 646,847 units in the Chinese market in 2023, claiming the title of the best-selling model of the year.

Image/Tesla Model Y Wins Annual Sales Champion in 2023

Source/CPCA New Energy Outlook Screenshot

Not just in China, but globally, the Model Y has emerged as the champion model, achieving 1.2 million deliveries in 2023, making it the world's best-selling single model.

However, being a market leader also attracts numerous challengers. Competitors at the same level and price range, both pure electric and extended-range vehicles, and even those from different segments and price points, have joined forces to compete against Tesla.

Especially in the rapidly developing Chinese new energy vehicle market, models competing with the Tesla Model Y have emerged in droves.

Against this backdrop, for the Model Y to maintain its leading position, it must continue to hone its skills.

1. Is the Model Y Becoming the 'Thorn in the Side' of Automakers?

How long does it take for a car to become the world's best-selling model?

In the era of internal combustion engines, it took Toyota Corolla 34 years to achieve a cumulative sales volume of 25 million units, earning it a place in the Guinness Book of World Records as the "Best-Selling Car of All Time." Similarly, Toyota RAV4 also took nearly 30 years to become the best-selling single model globally.

However, with the rapid rise of new energy vehicles, the Model Y surpassed its predecessors, the Corolla and RAV4, in just five years, claiming the title of the world's best-selling model in 2023.

Image/Tesla Model Y Wins Global Sales Champion in 2023

Source/Internet New Energy Outlook Screenshot

According to data from research firm JATO Dynamics, before the Model Y's ascension, Toyota had dominated the list of the world's best-selling models for four consecutive years.

Becoming the first electric vehicle to surpass gasoline-powered cars globally represents a milestone for the entire automotive industry. However, this achievement has also attracted numerous competitors to the Model Y, with almost every brand striving to develop a rival model.

The phrase "fully benchmarked against the Model Y" has become a common boast in the new energy vehicle industry.

At the bustling 2024 Chengdu International Automobile Exhibition, numerous new models from independent Chinese brands, including but not limited to the all-new IM W-Motor LS6, AVATR 07, and Voyah Zhidin, have identified the Model Y as their primary competitor.

Li Weimeng, CMO of IM Motors, stated candidly, "Not just us, but all automakers aspire to win the race. Several SUVs newly launched in Hall 10 of the Chengdu Auto Show have all mentioned Tesla Model Y, which remains the top choice in this segment."

As Li Weimeng suggests, the Model Y has become a thorn in the side of independent Chinese brands within the SUV segment.

In addition to the aforementioned models, others directly targeting the Model Y include BYD's Song PLUS Champion Edition, Song L, Song Pro, Song Max, Xpeng G6, the first SUV from ZEEKR, the ZEEKR 7X, and the L60, the first pure electric SUV from NIO's second brand NIO Life.

At the NIO Life brand launch event, William Li, Founder of NIO, stated bluntly, "The NIO Life L60 is benchmarked against the Tesla Model Y but will be priced approximately 10% lower."

Although the NIO Life L60 has not yet officially launched, pre-sales have commenced, with prices starting at 219,900 yuan, roughly 30,000 yuan cheaper than the Model Y.

Image/NIO Life L60

Source/NIO Life Auto WeChat Official Account New Energy Outlook Screenshot

Another noteworthy disruptor is the Zhijie R7, dubbed the "Huawei Model Y" by industry insiders.

Richard Yu, Executive Director of Huawei, Chairman of the Terminal Business Group, and Chairman of the Intelligent Automobile Solutions BU, unabashedly stated during a live stream introducing the Zhijie 7, "The Zhijie R7 offers an experience surpassing that of the Model X at the price of the Model Y. The Zhijie R7 surpasses the Model Y in terms of intelligent driving, chassis, cabin space, and range!"

Yi Tongyue, Party Secretary and Chairman of Chery Automobile, also remarked, "The Zhijie R7 outperforms the Model Y in every aspect of its product capabilities."

2. Disillusionment with the Model Y?

If in 2022 and 2023, the Tesla Model Y was still the top choice for those seeking a pure electric SUV, today, with China's new energy vehicle market penetration exceeding 50% and independent Chinese brands continuously innovating and iterating their products to launch a series of competitive models, the Model Y may still be a strong contender but no longer the unchallenged champion.

Da Ju (pseudonym), a 35-year-old who has driven a Honda gasoline-powered car for nearly a decade, began contemplating a vehicle upgrade after LIXIANG ONE L7 was introduced early last year. However, after much comparison over the past year and a half, Da Ju is still undecided about which car to buy, let alone the brand.

"From the LIXIANG ONE L7 to L6, to WENJIE M7, I've even test-driven AVATR 11 and visited the NIO Life L60 exhibit a few days ago... After much consideration, I find that they all perform well in terms of intelligent driving and aesthetics," said Da Ju. Indicating that he intends to switch from a sedan to an SUV, Da Ju added that he might make a decision after the official launch of the NIO Life L60.

Interestingly, Da Ju recalled saying during his college days, upon seeing a Tesla on the road, "When I earn money, I must buy a Tesla."

"But now that I've earned money, I haven't considered Tesla for either my first or next car. It was once because it was expensive, and now I don't see the necessity," said Da Ju, adding that the Tesla Model Y is no longer as appealing, technically or financially.

Posts such as "What Made Me Return My Model Y and Buy a NIO ES6," "Don't Buy a Model Y This Year," and "Why Not to Buy a Tesla Model Y" abound on Xiaohongshu (a popular Chinese social media platform).

Image/NIO ES6

Source/Internet New Energy Outlook Screenshot

In a post titled "One Year with My Model Y, and I Advise You Not to Buy One Yet," a Tesla Model Y owner listed six areas of dissatisfaction with their beloved car: interior design, suspension, sunroof, in-car navigation, voice control, and advanced driver assistance systems.

The owner mentioned, "Features like blind-spot monitoring and automatic parking, which are now standard on many domestic new energy brands, require additional payment on the Model Y."

Like Da Ju and the aforementioned netizens, many consumers are disillusioned with the Tesla Model Y. It's not because they can't afford it or that the Model Y is inferior; rather, independent Chinese brands offer models that better meet consumers' diverse needs for personalization, intelligence, and cost-effectiveness.

3. How Can the 'Aging' Model Y Maintain Its Competitiveness?

It's evident that as competition intensifies in the global new energy vehicle market, particularly in China, the Tesla Model Y faces unprecedented challenges.

While the Model Y remains a leader in the electric vehicle market, the rapid growth of China's new energy vehicle market and the rise of independent Chinese brands have presented consumers with more options.

To maintain its leading position in the Chinese market, Tesla may need to adjust its financial policies, interior design, vehicle configurations, and more.

In July, Tesla introduced new financing options for the Model 3 and Model Y, offering a 5-year interest-free plan for orders placed by July 31st, covering both the standard and long-range all-wheel-drive versions.

Subsequently, the interest-free offer has been extended repeatedly, seemingly becoming an alternative to direct price reductions for Tesla.

Image/Tesla 5-Year Interest-Free Plan

Source/Internet New Energy Outlook Screenshot

Amid the intense "price war," the Model Y's price range of 249,900 to 354,900 yuan is not particularly competitive. Therefore, continuing the more generous financing policy may be one of Tesla's best options. This strategy has proven effective, with over 45,000 Model Y units sold in China in August alone.

Tesla's optional features have long been criticized by both industry insiders and consumers alike.

During the Xiaomi SU7 launch event, Xiaomi's founder, Lei Jun, repeatedly referenced the high cost of optional features on the Tesla Model Y and subsequently reduced the prices of optional features on the Xiaomi SU7.

As consumers increasingly seek personalization, Tesla could upgrade the Model Y's configurations for the Chinese market. This could include offering more interior options tailored to Chinese preferences, enhancing personalization options, or introducing smart connectivity features designed specifically for the Chinese market to enhance the user experience and maintain sales advantages.

Beyond product improvements, enhancing services is another key factor.

For instance, Tesla could provide a one-stop shopping experience through its official app, encompassing online reservations, configuration options, price inquiries, financial plan confirmations, and vehicle delivery, thereby improving the overall shopping experience for consumers.

Alternatively, Tesla could further expand its sales and service network in China to provide more convenient and comprehensive services. This could involve increasing the number of service centers, enhancing service quality, and offering additional charging facilities and maintenance services.

With these adjustments, even if the Tesla Model Y fails to sustain annual sales of 1.2 million units, it can better cater to Chinese consumers' needs and preferences, thereby maintaining its leading position in the fiercely competitive market.

Moreover, Tesla's continued announcement of the impending launch of Full Self-Driving (FSD) in China and model updates serves as a potent tool for breaking the status quo. Clearly, while Tesla's flagship models face numerous challenges, they are not easily defeated. The introduction of an updated Model Y with FSD capabilities could well be a game-changer.