Can Tesla's latest innovations create a significant impact?

Produced by | NewProductSlight Finance | Author | Wu Wenwu

Tesla, under the spotlight, is currently grappling with numerous internal concerns and pressures. The company aims to unveil new game-changers and urgently needs to tell a new story.

01 Tesla Aims to Unveil New Game-Changers

In recent days, Tesla has regained its spotlight in the Chinese auto market.

Tongchedi recently broadcast an episode of its "Tongche Smart Refinery" vehicle-assisted driving test program, which simulated 15 types of high-risk accident scenarios using 36 popular models equipped with assisted driving systems.

Traditionally, automakers often boast about their industry-leading or advanced assisted driving systems. However, Tongchedi's large-scale tests are relatively rare in the industry.

One particularly surprising test result was that Tesla's Model 3 and Model X achieved the best results with an 83.3% pass rate in high-speed scenarios.

Tongchedi's test quickly sparked heated discussions. Some automakers chose not to comment, while others urged the industry to face the facts. Despite not being a ranking, Tesla's two models performed exceptionally well.

Even Tesla CEO Elon Musk couldn't resist sharing the relevant Tongchedi test on social media on July 25, stating that Tesla achieved the highest score in China without local training data. The topic subsequently trended on social media.

Regardless, Tongchedi's test allowed Tesla, which has long been compared to local Chinese automakers, especially new energy vehicle (NEV) makers, to hold its head high for once.

However, in the view of "NewProductSlight Finance," two other significant Tesla news stories are more noteworthy and reveal a crucial signal: Tesla aims to unveil new game-changers.

First, Tesla China officially announced the release of the Model Y L on July 16, with the caption "See you in autumn." Positioned as a luxury SUV with six seats for all scenarios, the new model has an axle base exceeding 3 meters and a length of about 5 meters. Market estimates place its price at approximately 400,000 yuan.

Source / Tesla Weibo

Second, multiple domestic and foreign media outlets have exposed Tesla's budget model, and some short video bloggers have even released spy shots of the interior of this model, indicating that Tesla's budget model is indeed on its way.

During a recent earnings call, Musk explicitly stated that the affordable car Tesla will launch by the end of this year will be a new version of the Model Y.

While the market has long anticipated Tesla's eventual launch of a six-seat model in the Chinese market, and Tesla's budget model has been occasionally reported by the media over the past year or two, it has been delayed.

The astute Musk and Tesla are unwilling to miss any business opportunities. Market anticipation and rumors suggest that Tesla's new models are only a matter of time. Moreover, as a global automaker, Tesla's market response speed is far inferior to that of local Chinese NEV makers.

In the view of "NewProductSlight Finance," both Tesla's upcoming six-seat Model Y L and the budget version of the Model Y new model are precisely targeting the Chinese market.

02 The Chinese Market is Tesla's Mainstay

Undoubtedly, the Chinese market will continue to be Tesla's mainstay, whether in the past, present, or future, and it will become increasingly important.

Currently, Tesla faces numerous internal concerns and pressures, and it can be said that Tesla is somewhat anxious.

Tesla's current predicament is evident in its latest financial report. The company will face considerable financial pressure in the coming months and beyond.

According to Tesla's recently released second-quarter financial report, the company generated revenue of approximately $22.496 billion during the reporting period, a year-on-year decline of 12%, marking the largest drop in at least a decade. Net profit for the second quarter was $1.172 billion, a decrease of 20.7% year-on-year.

Even Musk openly stated that Tesla does not rule out experiencing several "tough quarters" ahead, indicating that he has warned about Tesla's performance in the coming months or has given a preventive measure.

Behind Tesla's financial report data is the overall pressure on its automotive business. During the reporting period, Tesla's automotive business generated revenue of $16.661 billion, a year-on-year decline of 16%.

During the reporting quarter, Tesla's global vehicle deliveries totaled only 384,100 units, a decrease of nearly 60,000 units or 13.5% year-on-year. This marks the second consecutive quarter of double-digit declines. Especially in the European market, while overall electric vehicle sales in the European market grew by more than 20% in the second quarter of 2025, Tesla's sales fell by more than a third year-on-year.

In Tesla's home market of California, vehicle sales have declined for seven consecutive quarters, a situation that Musk and Tesla cannot help but be anxious about.

Source / Pexels

The Chinese market has always been Tesla's mainstay. In the second quarter of 2025, amid declining global sales for Tesla, China emerged as the only growth engine for the company.

According to data from the China Passenger Car Association, Tesla delivered 129,000 vehicles in China in the second quarter, contributing 34% of its global sales. Despite the strong second-quarter delivery performance, Tesla's cumulative sales in the Chinese market in the first half of the year were 263,400 units, a decrease of 5.4% from the same period in 2024. Its market share shrank from a peak of 15% in 2020 to 7.6%.

This shows that the Chinese market contributes more than 30% of Tesla's global sales. In the second quarter of this year, from a global sales perspective, one out of every three Teslas sold was bought by Chinese consumers. The importance of the Chinese market to Tesla is self-evident.

Against the backdrop of declining global sales for Tesla, especially the pressure from declining sales in the U.S. and European markets, stabilizing and increasing sales in the Chinese market has become crucial for Tesla to reverse the declining trend in global sales. It is not only a necessity but also one of the few options available.

Although Tesla's models still have relatively significant competitiveness globally, they have long faced issues of aging product lines in the Chinese market. Many media outlets and even Tesla owners have joked that Tesla's cars are like "unfinished houses."

Lars Moravy, Tesla's vice president of engineering, stated at a customer and investor exchange event held in the San Francisco Bay Area on July 27 (local time) that Tesla is currently facing challenges in its core automotive business. Affected by aging product lines, global sales have declined, and the company is at a critical juncture for strategic breakthroughs.

It can be said that Tesla is likely compelled to accelerate its new market initiatives and unveil new game-changers amid the current financial pressure and declining global sales.

03 Can Tesla's New Game-Changers Create a Shockwave?

Focusing on the Chinese NEV market, it continued to develop rapidly in the first half of 2025.

According to data from the China Association of Automobile Manufacturers and official sources, China's NEV production and sales in the first half of 2025 reached 6.968 million and 6.937 million units, respectively, increasing by 41.4% and 40.3% year-on-year.

At the same time, competition in China's NEV industry has intensified, with the industry in turmoil.

For example, on the evening of June 26, Xiaomi's second car model, the Xiaomi YU7, achieved a breakthrough of 200,000 orders within three minutes of its launch and exceeded 240,000 locked orders within 18 hours, astonishing the market.

Another example is NIO's Ledao brand, which held a product technology conference for the L90 on July 10. The model starts at 193,900 yuan with a battery rental option, attracting significant market attention. Meanwhile, Li Auto's first pure electric SUV, the Li One i8, was launched on July 29 with a starting price of 321,800 yuan, claiming to be the first to feature the VLA driver model.

NIO Auto, a new energy vehicle maker, has consistently ranked first in sales charts, while XPeng Motors continues to gain momentum. Huawei's HarmonyOS Intelligent Driving System is also making strides. Even joint venture automakers are aggressively pursuing NEV business, such as Dongfeng Nissan's N7, which has achieved good sales in the market, and Guangzhou Automobile Group's increasing number of NEV models on the road.

Source / Pexels

So, against the backdrop of fierce competition in China's NEV industry, can Tesla's new game-changer models create a shockwave?

It must be acknowledged that Tesla's brand image and influence still exist. This is precisely because Tesla has established itself as a luxury NEV brand. Although some market perspectives or car buyers may believe that Tesla's product capabilities have lagged behind, Tesla's sales in the Chinese market are still growing, which also illustrates this point.

In the NEV SUV segment, June sales figures show that Tesla's Model Y sold 44,848 units, maintaining its championship position with an absolute advantage, nearly doubling the sales of the second-place BYD Song PLUS NEV with 26,813 units. The popular Huawei AITO M8 ranked fourth on the list, with sales less than half of those of the Model Y.

In China's NEV market, SUVs are far more popular than sedans, station wagons, and other models. Tesla, of course, is well aware of this.

One of Tesla's upcoming new game-changer models in the Chinese market, the six-seat Model Y L, naturally targets the demand for six-seat large SUVs among Chinese families. Although it is delayed, it enriches Tesla's SUV product line and satisfies those who love the Tesla brand and prefer six-seat family vehicles.

In the past, Tesla's product lines were synchronized globally. Now, Tesla is launching a special model exclusively for the Chinese market, the six-seat Model Y L, directly reflecting Tesla's further acceleration of localization in the Chinese market and the adoption of a product strategy of "more children to fight better."

However, the market is more anticipating, or local Chinese automotive brands are more concerned about and eager to know about, Tesla's budget version of the Model Y new model, which is being accelerated.

The Tesla budget model, Model 2, that the market had previously anticipated did not arrive. Instead, there is concrete news about the new budget Model Y. It is evident that Tesla's budget Model Y is aimed at Chinese consumers and the Chinese market as its core target market.

A preliminary assessment suggests that Tesla's Model Y L, a six-seat luxury model, will pose some competition to most local Chinese NEV makers and create a certain shockwave.

The budget Model Y new model will have broader coverage and appeal to a wider audience. If its cost is low and its selling price further decreases, it will create a significant market shockwave. For example, XPeng's G6 and G7 will be competitors to the budget version of the Model Y in the future.

Tesla's main sales models have only undergone minor facelifts and upgrades, not a complete new generation. Their appeal lies in their relatively balanced comprehensive product capabilities, with neither prominent advantages nor disadvantages.

Of course, local Chinese automakers, especially NEV makers, have strong model competitiveness, with many brands and products attracting different car buyers. Therefore, Tesla's pressure will also increase.

In the future, what will truly enhance Tesla's competitiveness is its intelligent assisted driving system. At least this Tongchedi test also demonstrates that Tesla's intelligent assisted driving capabilities are still industry-leading.

At the 2025 World Artificial Intelligence Conference recently, Tesla revealed that its intelligent assisted driving system (driver-supervised version) is planned to be further implemented in China and Europe in 2025, pending approval from regulatory authorities.

Overall, Tesla is further emphasizing the Chinese market and will accelerate its localization efforts in the future. Tesla needs not only a global mindset but also a localized operational mindset in China.

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