Key Takeaways Tesla is set to produce and launch a lower-cost Model Y vehicle in China likely in 2026, Reuters reported Friday—citing people with knowledge of the matter.The vehicle will also eventually be launched in Europe and North America,

It’s a case of "Whatever you can do, I can do better," as Honda comes for the Tesla Model Y with its own electric SUV, the S7. Honda claims that the S7, its first-ever premium electric SUV, will break new ground thanks to exceptional comfort,

But now, it seems that the view of Tesla as a luxury foreign EV maker is waning and demand for Tesla’s cars in general is cooling. Despite a revamped Model Y going on sale in China recently, its overall sales in the country dipped by 51.47% in January, according to Teslarati.

Tesla has lost share to Chinese competitors, while Elon Musk’s political activities have led to steep declines in Tesla sales in Europe.

In a bid to regain market share in China, Tesla (NASDAQ:TSLA) is reportedly developing a lower-cost version of its best-selling Model Y in Shanghai. Citing people with knowledge of the matter, Reuters reported that the new model will be more compact and at least 20% cheaper to manufacture than the refreshed Model Y,

Orders for the revamped model, which starts from US$36,292 have crossed 200,000 units, according to Chinese tech site 36kr.