/// Who will be the Tesla killer?

Editor: Xiao Ying

The mid-sized SUV market where Tesla Model Y resides is becoming a target for criticism, and an increasing number of independent brands are beginning to layout this niche market, especially in the second half of this year, where five upcoming new cars have already begun surrounding Tesla Model Y.

On August 30th, the Zeekr 7X made its debut with a pre-sale price starting at 239,900 yuan and will be launched on September 20th;

On August 30th, AVATR 07, a collaboration between Huawei and Changan, opened blind reservations, with its pure electric and extended-range versions set to be launched in September;

On September 10th, Huawei and Chery's collaboration, the Zhiji R7, opened pre-sales with a pre-sale price starting at 268,000 yuan;

On September 19th, NIO's subsidiary brand's first model, the Ledo L60, will officially launch with a pre-sale price of 219,800 yuan.

On September 26th, the all-new Zhiji LS6 will officially launch, with pre-sale benefits priced between 229,900 yuan and 299,900 yuan.

In terms of product models, these vehicles are all SUVs, emphasizing intelligent experiences. Most importantly, the prices of these new cars range from 220,000 to 300,000 yuan - the same price range as Tesla Model Y.

At the Ledo brand launch event, NIO founder Li Bin stated, "Ledo L60 benchmarks Tesla Model Y, but its price will be approximately 10% lower than Tesla Model Y."

"Zhiji R7 offers an experience beyond Model X at Model Y's price. Zhiji R7's product capabilities far surpass Model Y in terms of intelligent driving, chassis, cabin space, and range!" said Yu Chengdong, Chairman of Huawei's Intelligent Automotive Solutions BU.

"Not just us, but all automakers want to win the race. Several SUVs just released in Hall 10 of the Chengdu Auto Show all mentioned Tesla Model Y, which remains the TOP 1 in this segment," said Li Weimeng, CMO of Zhiji Automobile.

In fact, as Li Weimeng said, Model Y has become a thorn in the side of independent brands in the SUV niche market. However, behind this lies the fact that Model Y is the undisputed sales champion in the SUV niche market.

Data shows that in 2023, Model Y became the best-selling model in the Chinese market, with total sales reaching 646,847 units and a monthly peak of 60,055 units.

In terms of sales over the past year (July 2023 - August 2024), Model Y has delivered a cumulative total of 467,200 new vehicles in the Chinese market, with an average monthly sales volume of 38,900 units, ranking first in sales regardless of energy form or price range during the same period in China.

As a leader in the intelligent pure electric vehicle market, Tesla has long maintained its position as the sales champion with its two flagship models, Model 3 and Model Y. These two models have also been the benchmark for domestic independent brands in the sedan and SUV segments.

Huawei-affiliated brands, NIO, Zeekr, and Zhiji all have their respective brand advantages. With these strong brands entering the mid-sized SUV market to join the battle against Tesla Model Y, can Tesla's dominance be broken?

01

Bigger and Smarter than Model Y

Let's first look at Model Y's product specifications: Tesla Model Y measures 4750/1921/1624mm in length, width, and height, with a wheelbase of 2890mm, offering a spacious interior but a famously minimalist interior and exterior design.

In terms of power, the Model Y Performance version achieves a 0-100km/h acceleration in just 3.7 seconds, making it a performance monster among electric vehicles.

Its range falls slightly short of competitors, with a maximum of only 659km. However, Tesla has established numerous Supercharger stations globally, providing convenient charging services for Model Y owners.

Intelligence is one of Tesla's core competitive advantages. While Model Y also boasts advanced autonomous driving technology, FSD is not yet available in China, limiting the functionality and scenarios covered by its autonomous driving assistance system in practical use.

Next, let's consider the upcoming Zhiji R7, AVATR 07, Zeekr 7X, Ledo L60, and Zhiji LS6. Overall, these models are larger than Model Y, offer more powerful engines, and higher levels of intelligent features.

In terms of appearance, the Zhiji R7, Ledo L60, and all-new Zhiji LS6 adopt a similar fastback design to Model Y, with a coupe-like SUV silhouette; the Zeekr 7X, on the other hand, resembles a standard family SUV akin to the AVATR 07.

In terms of overall dimensions, the Zhiji R7 is nearly 200mm longer and 60mm longer in wheelbase compared to the Model Y. Strictly speaking, the Zhiji R7 is slightly larger than the Model Y in terms of body size.

The AVATR 07 measures 4825/1980/1620 (1610)mm in length, width, and height, with a wheelbase of 2940mm. Both the Zeekr and Ledo models are similar in size, with lengths of approximately 4.8 meters and wheelbases of approximately 2.9 meters, slightly larger than the Model Y.

The all-new Zhiji LS6 boasts an even longer wheelbase of 2960mm, 70mm longer than the Model Y.

Not only is it larger in size, but the all-new Zhiji LS6 stands out with its "Lingxi" digital chassis and "Smart Four-Wheel Steering System," making it the only model in its class to come standard with rear-wheel steering.

In terms of power, each brand's strategy slightly outperforms the Model Y, with maximum motor power exceeding that of the Model Y.

It's worth mentioning that in addition to its pure electric variant, the AVATR 07 also offers an extended-range version.

The market has proven that extended-range SUVs have great potential. The Lideal L6 (with a price range of 249,800 to 279,800 yuan) sold 24,000 units in August, while the AITO M7 (with a price range of 249,800 to 329,800 yuan) sold 11,000 units, both within the same price range as Model Y but still significantly outperforming other pure electric models at the same price point.

In terms of intelligence, both the AVATR 07 and Zhiji R7 can be considered "Huawei-affiliated" models, equipped with Huawei's intelligent technology such as the Huawei Qiankun Intelligent Driving ADS 3.0 and HarmonyOS cockpit, positioning them at the forefront of the industry in terms of intelligence.

Ledo is a subsidiary brand of NIO, and NIO's technological accumulation will also be infused into this brand's models.

Previously, Ledo Auto has announced smart hardware for the next decade's technological architecture, including the AI-focused "SkyOS·Tianshu" full-vehicle domain operating system and leading AI-enabled smart applications for families, which will debut on the upcoming Ledo L60 model launching in September.

Simultaneously, Ledo will also benefit from NIO's battery swap system, offering better range anxiety relief compared to other pure electric vehicles.

The Zeekr 7X boasts comprehensive configurations and high product quality. In terms of intelligence, Zeekr models have also switched to the NVIDIA Orin X platform. Recently, Zeekr also introduced its end-to-end intelligent driving solution, positioning itself as a "bucket car."

Although these five domestic independent SUV models can "outperform" Model Y in many aspects from a product perspective, there are still many uncertainties regarding whether their product strengths will translate into sales.

02

Is Model Y Still the King?

Models claiming to be "Model Y killers" are not a new phenomenon. Prior to this, models announcing their intention to benchmark Tesla Model Y included the Xpeng G6, NIO ES6, Jiyue 01, Hyperion HT, and Denza N7.

However, their market performance has been relatively average. In terms of sales over the past year, none of these models have achieved monthly sales exceeding 10,000 units, with Jiyue 01, Hyperion HT, and Denza N7 hovering below 1,000 units for extended periods.

For the upcoming five new models, breaking Tesla's dominance will not be easy either.

During NIO's previous earnings call, Li Bin expressed expectations for Ledo Auto to achieve monthly sales of 20,000 units next year, which is still far below Model Y's average monthly sales. While Huawei is becoming a hot commodity in the market, it has not demonstrated sufficient appeal in pure electric vehicles.

According to Huawei's public order data, the Zhiji R7 surpassed 10,000 small reservations within 24 hours of pre-sales opening, which is not a bad achievement. However, when the Zhiji S7 was launched in November last year, Yu Chengdong also announced that "Zhiji S7 received over 20,000 pre-orders within 20 days of pre-sales opening." But until today, its cumulative sales have still not reached 20,000 units.

For Zeekr, the "speed of light" modifications made to the previous Zeekr 001/007 caused dissatisfaction among many existing owners, impacting the brand and raising concerns about whether the Zeekr 7X will follow a similar path.

For Zeekr, ensuring the interests of existing owners and maintaining a positive brand image will be crucial.

Therefore, while domestic brands are flocking to target Tesla, their true market competitiveness remains to be tested. Tesla Model Y continues to maintain its dominant position in the SUV niche market.

Why has Tesla been able to maintain its position as the sales champion with a single model for so long? One of the most direct reasons is brand effect.

As a pioneer and leader in the intelligent electric vehicle market, Tesla's brand awareness and reputation are unmatched by other automakers. Previously, industry insiders have compared Tesla's position in the electric vehicle field to that of Apple's iPhone in the smartphone industry.

Returning to the product itself, Tesla's self-developed core battery-electric technology and spacious interior are sufficient for most SUV target consumers, even though FSD is not available in China.

A Tesla Model Y owner shared, "I had another SUV before, and I'd heard that the interior of the Tesla Model Y was spacious. However, when I opened the door and the trunk, I was still amazed. It's incredible... the space is truly immense."

Amidst the wave of price cuts in the automotive market, Tesla has also introduced promotional policies such as five-year interest-free financing, which is attractive to potential customers.

It can be said that Tesla has taken the lead in occupying the minds of users in the pure electric vehicle market. However, amidst the siege of numerous domestic brands, Tesla cannot afford to rest easy.

Recently, media reports claimed that Chinese consumers are "snubbing" Tesla as Chinese automakers introduce more attractive models. Tesla's share of the electric vehicle market in China has declined from 9% a year ago to 6.5% in July this year.

On September 8th, Elon Musk rarely responded to this news on social media, stating, "People who believe these rumors are foolish. Tesla's Shanghai factory is operating at full capacity."

However, it is undeniable that Tesla is facing an increasing number of powerful competitors in the Chinese market. So, how can Tesla maintain its leading competitive advantage in China?

03

FSD May Become Tesla's Trump Card

While Tesla Model Y sales remain robust, Tesla's overall sales are facing a global decline in 2024.

In the first quarter of 2024, Tesla produced 433,000 new vehicles but delivered only 386,000, a year-on-year decrease of 8.53% and a quarter-on-quarter drop of over 20%, indicating significant inventory pressure on Tesla.

In the second quarter, Tesla delivered 444,000 vehicles, exceeding market expectations, and its production was unusually lower than sales by nearly 33,000 units.

Although there has been a slight improvement in production and delivery, according to data analysis by the overseas agency JATO Dynamics, Tesla's sales performance in Europe, the US, and China declined in the first half of 2024, with declines of 13% in Europe, 8% in the US, and approximately 10% in China.

Undoubtedly, Tesla is facing a global sales crisis. So, how can Tesla stabilize its sales?

From the time Tesla began sweeping the global market until now, the brand has relied on the Model 3 and Model Y. Moreover, these two models have only undergone a minor facelift since their launch, which is particularly poor given that the update iteration speed of new energy products is currently measured in half-year increments.

In addition, Tesla's new products have been disappointing. The newly launched Cybertruck pickup truck, despite much hype, has not made much of a splash, with deliveries reaching just over 10,000 units from its launch to the first half of 2024, even in the US.

Without Tesla introducing new products, FSD may become Tesla's "trump card," especially in the Chinese market.

During Tesla's second-quarter earnings call two months ago, Elon Musk publicly stated that Full Self-Driving (FSD) would be introduced in the Chinese market by the end of the year, but the timeline has since been pushed back.

On September 5th, Tesla's AI team released the global deployment roadmap for FSD functionality through its official social media account. According to the roadmap, Tesla plans to introduce FSD in China and Europe in Q1 2025, but the specific timing is subject to approval from local regulators.

In April this year, Elon Musk made a "lightning visit" to China, aiming to accelerate the launch of FSD. Shortly thereafter, he said in an internal letter that Tesla had obtained permission to test some assisted driving systems in China. In June, media reported that the Shanghai Autonomous Driving Demonstration Zone had issued road test licenses to Tesla, indicating that FSD may be undergoing testing.

Furthermore, Tesla may consider increasing its investment in Chinese data centers. In 2021, Tesla established a data center in Shanghai to enable localized data storage.

In April this year, the China Association of Automobile Manufacturers released a notification on the inspection of data processing security requirements, stating that all models produced by Tesla's Shanghai Gigafactory met compliance requirements, making it the only foreign-invested enterprise to do so.

In fact, Tesla's FSD is a leader in the global intelligent driving race, and its entry into the Chinese market has generated anticipation among domestic consumers.

However, foreign media reports also indicate that due to concerns about Tesla software causing accidents in the US and data security issues, even if Tesla's FSD is approved in China, it may initially be limited to a few cities such as Shanghai.

Tesla has not yet obtained permission to transmit driving data from Chinese Tesla owners to computers in the US for training its autonomous driving models.

Due to the aging of product lineups and the rise of local Chinese new energy brands, Tesla's FSD entering China may be a crucial point to stimulate sales growth before the next product cycle arrives.

For players in China's smart auto market, this will undoubtedly have a significant "catfish" effect, accelerating the pace of China's smart electric vehicle development.

Tesla, the king of pure electric vehicles, vs. new domestic automakers, who do you favor? Among the five upcoming new models, will there be one that will outperform the Model Y? Welcome to leave your thoughts in the comments section~