Tesla Upgrades Model Y in China in Response to BYD Competition

Feb 1, 2024

Tesla is turning to advanced self-driving features as it looks to fend off stiff competition in the Chinese market. The electric vehicle giant has upgraded the hardware on the Model Y car it sells in China as it looks to give buyers a reason to buy the vehicle amid various options in the market. The upgrade comes as the company faces stiff competition from local players that have been unveiling new, cheaper models.

Model Y Upgrade

Customers who purchase the new Model Y will have Hardware 4.0 with a new set of camera sensors and an onboard computer to facilitate driver assistance. The new car is being marketed as a Full Self Driving Beta or FSD Beta. Dubbed as the most advanced set of hardware, it is designed to take self-driving to a whole new level.

The new hardware features more processing power and better cameras, allowing the car to understand the environment better. Consequently, the car would be able to drive itself much better than the previous models without the possibility of driving into people, let alone other vehicles or objects. In some markets, Tesla has already integrated the hardware in Model S and Model X cars.

Integrating Hardware 4.0 on Model Y is part of Tesla’s push to strengthen its competitive edge in the mass market. The company faces stiff competition in this market from cheaper models offered mainly by local manufacturers.

BYD Competition

BYD has proved to be the biggest threat to Tesla in its push for market share in the highly lucrative Chinese EV market. While Tesla CEO Elon Musk once dismissed the Chinese automaker by laughing at their products, the company has bounced back to the extent of dethroning Tesla as the top EV maker. In the fourth quarter, the Chinese company sold more battery-powered cars than its US rivals.

BYD’s rise to dominance has been accelerated by the Chinese government’s massive support for the EV sector. The government has offered incentives to buyers looking to buy electric cars. While the support has mainly targeted Chinese automakers, they have worked to the disadvantage of Tesla, which was once the dominant player.

The Chinese government subsidies have been the bone of contention, with some governments reiterating they give Chinese automakers an unfair advantage. The European Commission, which is the executive arm of the European Union, has launched investigations into the subsidies given to electric vehicle makers in China.

Having dominated the Chinese market, BYD has set its sights on pursuing opportunities for growth in the international market. The company is expanding aggressively, having made its products available in the UAE, Thailand, and the UK. In Southeast Asia, the company controls 43% of the market share. BYD is also following in Tesla’s footsteps and has committed to opening its first European manufacturing plant in Hungary.

Facing stiff competition from Chinese EV makers, Tesla is turning to hardware upgrades to strengthen its competitive edge. The company has also carried out price cuts on some of its models as it looks to make them affordable for the mass markets.

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