Tesla is preparing an update of its main hit – Model Y, and plans to start mass production of the updated electric crossover at the Gigafactory in Shanghai by the middle of 2024, writes Bloomberg with reference to knowledgeable sources. This step is in fact the answer of the market leader so far to increased competition and acceleration of the release of new electric cars by Chinese manufacturers.

Tesla ❤️China

The eccentric billionaire Elon Musk’s company continues to invest heavily in expanding its business in China — despite the threatening strengthening of authoritarianism under the auspices of comrade Xi Jinping, who continues to repress the technology sector, as well as the prolonged deterioration of relations with the United States, with the risk of a military conflict over Taiwan. Tesla recently purchased a 19.7-hectare plot of land for the future Megafactory battery factory (additional 40 GWh ≈ 10,000 Megapack batteries per year) — next to Giga Shanghai, which is currently the largest (production capacity of the factory — 950,000 cars) . year). There are also reports of the restart of Phase 3, a new line to further expand Giga Shanghai’s production capacity by an additional 500,000 cars. Preparations for this began back in 2021, but this project was put on hold last year. Most likely, Phase 3 is connected with plans to release the famous Tesla for $25,000, which was first announced in 2020 – now this model on the next-generation platform is expected in 2024-2025 and, as it were, it will borrow some design elements of the Cybertruck. She is assigned a key role in achieving Tesla’s ambitious goal of reaching 20 million annual sales by 2030.

The Model Y update is the new most popular car in the world

Returning to the subject of the Tesla Model Y update, there are still few specifics — Bloomberg’s anonymous informants only mention more significant and noticeable changes to the exterior and interior than this fall, when they added a new wheel design, multi-colored exterior lighting and slightly increased the range.

NEWS: New Model Y refresh will soon be built in Giga Shanghai. The best selling vehicle in the world is about to get even bigger. pic.twitter.com/gBtra07RJN

— Teslaconomics (@Teslaconomics) December 27, 2023

According to Bloomberg interlocutors, the release of the updated Model Y will be set up at the Phase 2 facilities of the Shanghai Gigafactory, which will take a break for about a week during the New Year holidays for a partial update. The necessary preparatory work is currently underway, and later, immediately before the start of mass production, additional line modernization and adjustment work will be required.

The Tesla factory in Shanghai, which began operating in 2019, now produces more than 50% of all the company’s cars, and the compact electric crossover Model Y, which was released in 2020, will receive the title of absolute bestseller in 2023. And here there is no doubt – at the beginning of the year, Model Y moved from the pedestal of the long-term leader Toyota Corolla and since then has confidently held the leadership in the whole world. It is expected that by the end of 2023, Tesla will ship 1.22 million to customers and surpass the result of Toyota Corolla (1.08 million units) by 13%.

Looking purely at China, the Model Y accounts for nearly 75% of all Tesla sales. According to the China Association of Automobile Manufacturers, in November, sales of new electric cars (pure battery BEVs + PHEV plug-in hybrids) increased by 40% year-on-year and by 8.9% by October to 841,000 units.

China now exports more cars than any other country, and it was helped more by increasing sales to the terrorist aggressor country of Russia to overtake the previous leader (Japan).

The end of the dominance of Japan and Germany in world car exports

According to Counterpoint, China is now the largest market for electric vehicles, with China accounting for 58% of global BEV sales in the third quarter, compared to about 12% in the US.

BYD is the new leader in sales of “clean” electric cars

Tesla (and indeed all other major players, including Toyota, Volkswagen, Renault-Nissan, Stellantis, etc.) find it increasingly difficult to compete with Chinese automakers, which, thanks to state subsidies, literally flood the market with electric cars that are quite good for the price and characteristics – for example, more well-known and experienced BYD or upstarts Nio and Xpeng. Most likely, by the end of the last quarter of 2023, Tesla, after many years of leadership, will cede the title of the largest manufacturer of battery electric cars to BYD, which will enter the top 10 largest automakers in 2023. By the way, BYD is ahead of Tesla in total sales of electric cars (battery electric cars + hybrids) from the third quarter of 2021.

Actually, since the beginning of the year, BYD has been rapidly closing the gap with Tesla, so everything is quite expected and natural. It is worth noting here that it is about sales in pieces, while in terms of money, Tesla is still far ahead thanks to profitability (at Elon Musk’s company, this indicator is the highest in the industry). As an analogy, you can probably take the situation in the smartphone market, however, it is expected that by the end of 2023, Apple will become the leader instead of Samsung for the first time. Analysts at Bernstein expect the gap on some metrics to narrow significantly next year, with Tesla forecasting $114 billion in sales versus BYD’s $112 billion.

According to preliminary data, in the fourth quarter Tesla produced a total of 500,000 cars at its five key plants (a new record) — traditionally deliveries (cars already shipped to customers) will be somewhat smaller. The official figures will appear on the evening of January 2, when Tesla publishes the report. But already now it is safe to predict 1.8 million by the end of 2023, taking into account the 1.3 million electric cars that Tesla managed to ship to customers in 9 months of 2023. This also means that Tesla has reached the production of two million cars per year.

As for BYD, it continues to expand internationally, and in the past two years alone, it has established supply to approximately 60 countries and territories. Indeed, the European Commission recently opened an investigation into Beijing’s anti-competitive subsidies, with potential far-reaching consequences and even an EU trade war with China, along the lines of the US-China standoff. BYD is preparing new third-generation electric cars for 2024, which will be distinguished primarily by the latest technologies, including autonomous driving systems.

And finally: as already mentioned above, there are no signs of a significant slowdown in demand for electric cars in the US, the EU, or Ukraine yet. By the end of 2023, global sales of new electric cars (“pure” BEVs + PHEV hybrids) are expected to be 14-15 million – against 13.75 million in 2022. At the same time, the share of fully electric models will increase to 7% against 1% in 2020.

Tesla, BYD and “traditional” manufacturers. Electric cars are on the way to a new record — sales this year will reach 14 million. When is the end of DVZ?