Tesla Model Y Closes In On Model 3, As China Quality Issues Loom

Tesla Model Y Tesla Model 3 China

The Tesla Model Y dropped below $40,000 for the first time in the U.S. and appears on track to catch the Model 3 in sales in 2021. But issues in China could impact Model Y sales there.



Tesla delivered a combined* 442,511 Model 3 and Model Ys globally in 2020. And a bigger and bigger chunk of that number is Model Y sales. In the U.S., the Model Y is trending toward catching the Model 3, as the latter’s sales numbers drop.

Tesla Model 3 U.S. sales in 2020 were 95,135, down 32% year-over-year, according to Experian (via Automotive News and InsideEVs). Meanwhile Tesla Model Y sales surged to 71,344 — and that’s not even a full year because sales didn’t begin until March.

Price has something to do with that. The Model Y has been getting regular discounts. The price was reduced once already in July by $3,000. And the latest cut this past week puts the Model Y below $40,000 for the first time.

  • Tesla Model Y Standard Range: now $39,990, was $41,990
  • Tesla Model 3 Standard Range Plus: now $36,990, was: $37,990

Red Flags in China

While Model Y sales take off in the U.S., Tesla has been facing quality issues in China, as the Wall Street Journal described in a video posted Saturday.



Sales in China brought in more than $66 billion in revenue for Tesla in 2020 in the wake of the company completing construction of a manufacturing facility there. But in early 2021 Chinese regulators reported an “unusual uptick of customer complaints about Tesla quality issues,” the Journal said.

Other reports, such as this one from Japan’s Nikkei titled “Tesla and Musk risk wearing out China welcome over quality fears,” point to quality issues in China.

Tesla’s executives in Shanghai and Beijing have been summoned to meet with China’s market regulator and four other central government departments over customer complaints including unusual acceleration, battery fires and problems with updating the cars’ software…

—Nikkei, February 9, 2021

The made-in-China Model 3 became China’s best-selling EV after it launched in early 2020, exceeding sales of Chinese brands like BYD.

Model Y sales in China began earlier this year.

Most of the issues appear to be centered on the Model 3 but with Model Y sales taking off globally that could become a focus for Chinese authorities too.

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