Tesla Officially Unveils Model Y: Who Are Its Chinese Rivals?
COVID-19 and China
Tesla Model Y. PHOTO: Credit to Tesla

March 14th, 2019 /EqualOcean/ - Tesla officially launched its latest SUV Model at the company’s design studio in Los Angeles. As expected, it's an upgraded version of its Model 3 and seats seven passengers comfortably.

The Model Y is capable to accelerate from 0 to 60m in 3.5 seconds. The Standard Range version is able to reach 230 miles between charges. Production is expected to begin sometime in early 2020 and its estimated to pick up sometime next year. The standard Model Y starts at USD 39,000 and USD 47,000 for the Long Range model. 

Who Are Its Chinese Rivals?

China’s Electric Vehicle industry includes NIO (蔚来), Xpeng Motors (小鹏汽车), and WM Motor (威马). All three have started its mass production delivery. Tencent(腾讯) and Baidu(百度)are backed by NIO while  WM motor and Alibaba(阿里巴巴)are backed by XPeng. Baidu, Alibaba, and Tencent are considered China’s “Big Three”.

NIO Inc. is the first to go public despite that it is not the oldest EV maker among these startups. NIO launched its first electric SUV, the ES8, on NIO Day at Beijing Wu Ke Song Arena on December 16, 2017. The minimum price for the ES8 is USD 66,634.9 with a maximum of USD 67,824.8.

The ES8 has a 3,010-millimeter long wheelbase, the longest in its class. NIO unveiled the NIO Power which also includes the “NIO Power Home”, a supercharger network, and Power Mobile on NIO Day. By 2020, NIO plans to build over 1,100 Power Swap Stations and deploy over 1,200 Power Mobile vehicles.

ES8 commenced deliveries starting in Jun 2018. Its production and delivery steadily ramped up, according to the company. “We hope that we can have more people interested in smart electric vehicles by presenting ultimate products and services, and then we can achieve our vision of bringing back blue skies.” NIO Founder and Chairman William Li, said at inaugural NIO Day, “NIO wants people to enjoy owning a car again and aspires to redefine the experience of owning a car. The ES8 launch is another beginning for NIO.”

NIO has opened NIO Houses in Beijing and announced their plan to open more NIO Houses in nine more cities in 2018. This includes Shanghai, Shenzhen, Nanjing, Guangzhou, Hangzhou, Chengdu, Hefei, Suzhou, and Wuhan.

WM Motor, a leading Chinese EV Maker, has begun its first mass  EX5 deliveried in September 2018.

Thanks to China's Electric Vehicle subsidies, three different battery versions are available for ranges of up to 300, 400 or 460 km. WM Motor announced that it has received  CNY 3 billion (USD 446.37 million) in a new round of financing on March 8. The investment will be used to improve user experience and R&D.

Its existing investors include Chinese tech giants, Baidu and Tencent,  Sequoia Capital China, and Cheng Tong Fund, the state-funded investment company. Baidu alone invested about CNY 1 billion($148.7million)in the company.

On Nov. 7, 2018, Xpeng Motors released its first electric SUV production, Xpeng G3. It has a similar positioning with Tesla Model Y. Which means it is on par with the other Tesla models. The price starts at CNY 227,800 (USD 33,000) before subsidies. In some Chinese cities, it cost only about CNY136,000 (USD 19,800) after subsidies.

The Xpeng G3 has a length of 4450mm and wheelbase of 2610mm. Its electromotor offers the maximum power at 145kW and maximum torque of 300N•m. In terms of battery power, the Xpeng G3 adopts a liquid-cooled lithium battery pack with a range of 351km and 365km (NEDC).

In  January 2018, it secured a CNY2.2 billion (USD 348million) investment round led by two Chinese tech giants (one of which is Alibaba) in order to ramp up Xpeng G3 production. The company is now starting deliveries of the electric vehicle.

Xpeng Motors CEO, HE Xiaopeng (何小鹏), said that the Xpeng G3 was designed to “not only be a normal vehicle but also a user-friendly smart vehicle”.

New Profit Opportunity in China?

With help from the state and provincial subsidy policy, China’s market accounted for about half of the global EV market in 2018. It is growing faster than any other country in the world.

However, the subsidies are shrinking. The subsidy will be slashed by 30% in 2019 compared to the prior year and end completely in 2020. It is crucial for EV manufacturers to survive in 2019.

A few days ago, Tesla announced that it's ready to start selling the cheapest versions of its Model 3. As a result of federal tax credits, it threatens the company’s growth.  Elon Musk announced that Tesla will be transitioning to an online-only sales model on March 1st,2019. The company will close many of its stores around the world and lay off an undisclosed number of workers, according to Elon Musk’s twitter.

Tesla's stock price fell after the company cut its Model 3 prices in China. Customers are also concerned that they would miss the deadline for a tax credit on electric vehicles after Tesla's delayed delivery times.

However, the new EV credit system is still strong, and its effect can still be felt from previous years.

Beijing authorities announced that the country will scale back subsidies for electric vehicles with a range of less than 300km. Any manufacturer who misses the target will have to purchase credits from another who has a surplus.

Midsize and large EVs with a range of 400km or more will get a 10% increase in new subsidies applicable to them. Tesla will receive credits from the Beijing government if the company completes its Shanghai factory and starts mass production.

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