With the recent rumors that Tesla is pushing forward its Model Y efforts in China, an analyst takes a look at the small, all-electric crossover's potential impact. Sure, Tesla built the Model Y to satisfy the massive U.S. small SUV market, but in China, the Model Y may be a huge hit as well.

Tesla built its Tesla Gigafactory 3 in China in record time. Now, it's wrapping up phase two so it can begin to produce and deliver Model Y crossovers in the country. Keep in mind, while Tesla encourages all automakers to surge forward with EVs, it still considers them rivals, and we know CEO Elon Musk wants to stay ahead. With Chinese EV maker Nio and Xpeng having success with electric crossovers, it's high time to launch the Model Y in China.

When Tesla started building a factory in China, many skeptics claimed the Model 3 wouldn't sell well in the country due to a host of competition making cheaper EVs. However, the doubts were quickly proven wrong as the Model 3 is hugely popular in the country. Will the Model Y be even more popular? Will it work to cannibalize Model 3 sales in China?

Securities firm Tianfeng Securities follows Tesla closely in China. It estimates Model Y sales in the country could reach some 30,000 per month. Keep in mind, Tesla delivered about 10,000 Model 3 sedans per month in China. If its estimate proves true, Tesla could deliver about as many Model Y crossovers in a year in China as it sold all vehicles across the globe in 2019.

Tianfeng goes so far as to say that this could push Tesla sales in China to 880,000 annually in 2021, which is a whopping 76-percent year-over-year growth. The firm says Tesla sales could hit 1.28 million by 2022. The only catch here is for Tinafeng's estimates to become even close to reality, it suggests Tesla will first have to offer a cheaper version of the Model Y, equivalent to about $41,000 USD. However, the firm expects Tesla to reduce the price. The firm wrote:

“Tianfeng Securities released a research report that, from the perspective of Tesla‘s overseas pricing strategy, the price difference between Model Y and Model 3 is only 6-9%. Therefore, after Model Y is mass-produced in China, it is expected that Tesla will continue to implement the price reduction strategy. The entry price is expected to drop to 275,000 yuan.”

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