Tesla Inc started accepting orders for its new Model Y L in China this week with a starting price of 339,000 yuan ($47,184), its website showed, as it refreshes its line-up in the world’s largest auto market to battle growing competition.

Tesla first launched the Model Y in 2020 and it became the world’s best-selling car in 2023. The ageing model lost some sales momentum last year, hurt by competition from local rivals in China such as Xiaomi’s (1810.HK) YU7, while in other markets demand for electric vehicles has weakened.

In January, Tesla launched a new version of the Model Y with a redesigned exterior and upgraded features in Asia Pacific markets and in July registered plans with Chinese authorities for the new Model Y L.

A longer-range, rear-wheel drive Model 3 is also coming to the Chinese market, according to filing information published on China’s industry ministry website in July.

Elon Musk’s Tesla registered an 8.4 per cent fall in July sales of its China-made electric vehicles.

The launch of a six-seater Model Y L is crucial for Tesla’s strategy in China, the world’s largest and most competitive EV market.

Chinese consumers highly value spacious, family-oriented SUVs, a segment where local brands have gained significant ground.

This new variant, with its longer wheelbase and added seating, directly addresses this key market preference, aiming to boost Tesla’s sales and re-establish its competitive edge against domestic rivals like Li Auto and AITO.