Amid all of the glitzy, high-dollar press conferences about groundbreaking new cars and technology at CES 2025, leave it to Tesla to quietly drop updates to the world’s best-selling car on its Chinese website with zero fanfare.
Yes, the Tesla Model Y Junpier is finally here. And it is simultaneously both extremely important to Tesla and the global EV scene, and a bit passé. Whether it can revive Tesla’s sales fortunes is the subject of this Friday edition of Critical Materials, our morning news roundup about tech and the auto industry.
Also on deck as we close out a busy week: how cars stole the show at CES, and a look at whether the auto industry can grow in 2025. Let’s dig in.
30%: The Model Y Arrives At A Time When Tesla Needs To Act Like A Car Company
Photo by: Tesla
Well, that was unexpected. (Kind of.) Tesla’s updated Model Y “Juniper” refresh went live on its Chinese website Thursday evening with zero announcements from the automaker. Just like the updated “Highland” Model 3 in 2023, Tesla did this because it will head to China—its most important global market—first, followed by the U.S. and Europe.
There’s no timeline on when that will happen, and Tesla CEO Elon Musk spent the evening posting about “woke” firefighters, Germany’s AfD party and “defunding” the Sierra Club. Oh well.
I bring that up here because it does illustrate the challenges facing Tesla right now: declining sales, a lack of focus on its core product (selling cars) and continual allegations that the man up top—whose very presence at Tesla is the key driver of its value to Wall Street—is distracted by his countless other ventures, which now include global politics.
We know Tesla encountered its first sales decline in a dozen years in 2024. While the Cybertruck received a ton of initial hype, even years of it, there are signs that demand is cooling off hard. And the updated Tesla Model 3 has many good improvements, but at the end of the day, it’s a sedan in an SUV world.
So is this new Model Y good enough to fend off newer and even better electric competitors? Here’s the lay of the land from CNBC, a few days ago before the Juniper debuted:
The U.S. electric vehicle maker saw annual sales in China jump 8.8% to a record high of more than 657,000 cars in 2024. In December alone, its sales rose 12.8% from the previous month to 83,000 units, according to Tesla China.
However, Tesla has been losing market share to Chinese new-energy-vehicle players, down from 7.8% in 2023 to 6% in the January to November period last year, according to Bill Russo, founder and CEO of Automobility, who believes Tesla is “struggling to keep pace [with domestic rivals] and has a limited and aging product portfolio.”
Brand resiliency and price cuts have supported Tesla’s sales so far, said Tu Le, founder and managing director of Sino Auto Insights, but he was less certain that Tesla could keep up its momentum in 2025, given the lack of new products and increased local competition, especially from Chinese companies.
It’s one problem in the U.S. market, for example, when the Model Y faces competition from interesting new players like the Chevy Equinox EV or updated Hyundai Ioniq 5 (which now comes with a Tesla-style NACS plug too.) It’s another problem, a bigger one, in China.
There, Tesla has been coasting on brand strength and price cuts for years now—relying on its ability to undercut competitors to juice sales, albeit at the expense of profits and revenue.
More from CNBC:
Its best-selling Model Y now starts at 239,900 yuan after the discount, while the Model 3 sedan starts at 231,900 yuan — Tesla had cut its prices by 14,000 yuan in April — according to its website.
Still that marked a significant premium over a swath of cheaper models offered by Chinese domestic carmakers. BYD, which dominated the market with around 34% market share, prices one of its best-selling models Seagull at 136,800 yuan, and the more affordable Yuan Plus model, starting at 96,800 yuan.
As the price war extends into the new year, Li Auto introduced cash subsidies of 15,000 yuan per purchase along with a three-year zero-interest financing scheme, according to a post last Thursday on its social media Weibo account. Nio also extended a similar three-year zero-interest loan plan for its EV buyers.
I actually like the way the new Model Y looks. And I spent a week over the holidays in an updated Model 3, which you’ll read about here soon; I liked it a lot, even if it’s not sure if it wants to be a BMW 3 Series or a Toyota Corolla. I’m sure the Model Y’s updates will be welcome.
But are those updates enough to fend off BYD and Zeekr and Nio and Xpeng and the rest? And even Chevy and Hyundai here in America? It’s got its work cut out, that’s for sure.
60%: Cars Stole The Show At CES 2025
Photo by: Honda UK
Sony-Honda Afeela 1 CES 2025
Meanwhile, lots of people I spoke to in Las Vegas this week went into it saying that CES wouldn’t be a very big deal on the automotive front this year. Bunk! Cars were everywhere at CES. I’ve never been more convinced—not that I needed it—that the tech industry sees your car as the next great platform for streaming apps, groundbreaking hardware and software and subscription services. (Whether you like it or not.) Besides the big news we covered from BMW, Honda, Afeela, Toyota, the Chinese automakers and more, there was the tech side of things too.
Here’s Yahoo Finance to explain:
Nvidia and [CEO Jensen] Huang also made auto headlines themselves. “We’ve been working on self-driving cars now for some time,” Huang told Yahoo Finance’s Dan Howley at CES this week, noting that Nvidia’s technology for autonomous driving is already set to generate $5 billion in annual sales for the AI chipmaker.
Huang unveiled Nvidia’s Cosmos platform for developers to simulate its self-driving vehicle software, the company’s latest push into the auto market.
“If it’s already a $5 billion business for us, imagine how big it’s going to be when we have 100 million new [self-driving] cars per year,” Huang added. “This is likely going to be one of the largest robotics industries in the world and one of the largest computing industries in the world.”
Nvidia announced new partnerships with Toyota (TM) to power computing and autonomous tech for its next-gen EVS and autonomous trucking company Aurora Innovation (AUR), which will use its specialized chips for self-driving vehicle systems. Nvidia’s newest DRIVE Thor chip for autonomous driving is based on the architecture of its latest Blackwell AI chips.
Toyota did not say which upcoming vehicles would use Nvidia tech, while the Aurora deal also brings in Germany’s Continental (CON.DE), which will manufacture the driverless trucks.
The car game isn’t about horsepower and handling anymore. It’s about chips and batteries. Anyone who can’t see that right now will soon enough.
90%: Can The Auto Industry Bounce Back To Pre-COVID Growth?
Photo by: Subaru
One thing that gets lost in the discourse about the EV slowdown (and there really wasn’t one, if we’re being honest) is that the rise of the modern electric sector coincided with cars of all kinds being more expensive than ever before. Those prices have cooled off somewhat, but the economic headwinds of the post-COVID world have hurt the entire industry. And it still is.
Here’s Automotive News to explain:
Rising incentives, falling interest rates, and expanded hybrid and electric offerings helped push U.S. new-vehicle sales to the highest level since before the coronavirus pandemic. But uncertainties around a new presidential administration and a continued affordability crisis could hamper growth in 2025.
U.S. light-vehicle sales reached 16 million in 2024, a 2.5 percent gain from 15.6 million in 2023 and the most since 2019. Fourth-quarter sales jumped 7.1 percent.
General Motors, Toyota Motor Corp., Ford Motor Co., Honda Motor Co., Hyundai Motor Group, JLR, Mazda and Mitsubishi all gained share last year, while Stellantis, Tesla, Mercedes-Benz, Polestar and Volvo lost the most ground.
“It was certainly a very positive year overall,” Tyson Jominy, vice president of data and analytics at J.D. Power, told Automotive News. “But affordability remains a challenge for the industry.”
The average monthly payment was around $740 at the end of December, Jominy said.
Ouch. In Europe, we’re seeing what happens when market growth hits a wall and existing players get crowded out by new ones. If prices don’t cool off in the U.S., we could see a similar situation over time. And the new promised tariffs from the incoming Trump Administration could make things worse.
100%: New Model Y: Is It Enough?
Photo by: Tesla
Do you think the updated Model Y has the juice, or should Tesla be doing a lot more with this car—and its whole lineup? Let us know in the comments.
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