China’s Zeekr will launch its first electric SUV, priced to undercut Tesla’s Model Y

Electric vehicle companies Zeekr announced Friday that it will launch its first SUV in China next month, cutting the price of the Tesla Model Y in the country by more than $1,400.

Zeekr 7X, priced at 239,900 yuan ($33,829), is EV China’s first midsize electric SUV and will be launched on September 20.

It is the latest Chinese EV to take on Tesla’s Model Y, which has also been challenged by Xpeng and Nio. Zeekr plans to ship the 7X globally later this year. It said the launch is targeted at the global market but did not specify the region.

The five-seat Zeekr 7X SUV is equipped with two battery options that allow users to drive between 605 kilometers and 780 kilometers (about 376 to 485 miles) on a single charge. Developed by Zeekr engineers, the lithium-ion phosphate battery takes 10.5 minutes to charge to 75%, the company says.

Zeekr has previously said that its latest battery offers the fastest charging in the world, beating Tesla batteries.

The company said it aims to take it on Tesla’s Model Y, also five seats, with the new 7X, which can accelerate from 0 to 100 kilometers per hour in just 3.8 seconds.

Tesla’s Model Y, which starts at 249,900 yuan ($35,240), is one of the best-selling electric vehicles in China, according to data published by user Tslachan on X.

China’s electric vehicle market is in an intense price war. just this week Xpeng released the mass market Mona M03 with models starting at less than US$17,000. In May, the Chinese brand Neo launched a low-cost brand, Onvo, with cars priced $4,000 less than Tesla’s Model Y.

Before March 2024, Xiaomi released the SU7 at 215,900 yuan ($30,408) to beat Tesla’s Model 3 pricing at 245,900 yuan ($34,676). Xiaomi CEO Lei Jun admitted that the price means that every car will be sold at a loss.

As Chinese EV makers continue to release new models at lower prices, it seems increasingly difficult for American automakers to remain competitive. The Early US 2024 Quality Study released in June this year showed that Tesla is losing its lead even among legacy automakers due to quality issues.

On the other hand, Tesla has gotten easier for the tariffs imposed by the EU on Chinese imports with 9% compared to the Chinese car manufacturer, especially against the 36% imposed. SAIC.

Tesla Model Y prices in China have been unchanged for nine consecutive weeks.

In July, Zeekr sold 15,655 cars, a 30% year-over-year increase, while Tesla sold 46,227 cars, a 47% year-over-year increase.

Zeekr also entered Hong Kong last month, and the company plans to launch a right-hand drive version of the 7X next year.

—CNBC’s Evelyn Cheng contributed to this report.