Tesla (TSLA) recently launched Model Y L, a longer, six-seater version of its best-selling electric SUV, in China. However, CEO Elon Musk has cast doubt on its availability in the United States. The decision is tied to the company’s focus on autonomous driving technology. TSLA stock was down about 3% on Wednesday.
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On his social media platform, X, Musk suggested that the Model Y L might not ever be produced for the U.S. market. “This variant of the Model Y doesn’t start production in the US until the end of next year. Might not ever, given the advent of self-driving in America,” he wrote.
This reflects Tesla’s growing strategy of prioritizing autonomous driving technology over expanding its lineup of human-driven vehicles.
Why Tesla Might Skip the U.S. Market
Tesla’s decision not to prioritize U.S. production of the Model Y L stems from its belief that full autonomy is approaching rapidly. Musk has long argued that building traditional vehicles will become “pointless” in a self-driving future. TSLA is currently scaling its robotaxi operations, including a limited service in Austin, and plans to launch the Cybercab, a steering-wheel-free autonomous vehicle, next year.
This shift raises questions about Tesla’s product roadmap as the six-seat Model Y L could have attracted American families seeking a more affordable alternative to the Model X.
Model Y L Success in China
Priced at about $47,200, the vehicle is built at Tesla’s Giga Shanghai factory. The model is equipped with a longer wheelbase, captain’s chairs, and a spacious third row, features tailored to Chinese families. Also, it offers Tesla’s Full Self-Driving (FSD) capabilities. Importantly, it attracted over 40,000 reservations following the launch, signaling strong demand among Chinese consumers.
The launch in China comes as Tesla faces intense competition from local EV manufacturers such as BYD (BYDDF), Xiaomi (XIACF), and XPeng (XPEV). China’s EV market is more advanced and highly competitive, with local brands rapidly gaining market share by offering affordable cars packed with self-driving and voice control technologies.
Overall, the Model Y L’s launch in China is a strategic move to regain market share in the world’s most competitive EV market.
What Is the Prediction for Tesla Stock?
Turning to Wall Street, TSLA stock has a Hold consensus rating based on 14 Buys, 15 Holds, and eight Sells assigned in the last three months. At $307.23, the average Tesla price target implies a 4.34% upside potential. The stock has declined 2.5% over the past six months.
