China’s Zeekr targets global markets with its electric SUV, priced to undercut Tesla’s Model Y

Electric vehicle company Zeekr announced Friday that it would launch its first SUV in China next month, undercutting Tesla’s Model Y pricing in the country by over $1,400.

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

It’s the latest Chinese EV to take on Tesla’s Model Y, which has also been challenged by Xpeng and Nio. Zeekr plans to deliver the 7X globally by the end of this year. It said the launch was targeted at global markets but did not specify the regions.

The five-seater Zeekr 7X SUV comes 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’s engineers, the lithium-ion phosphate batteries take 10.5 minutes to charge by 75%, the company said.

Zeekr has said in the past that its latest batteries offer the fastest charge in the world, beating that of Tesla’s.

The company said it aims to take on Tesla’s Model Y, also a five-seater, 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 the throes of an intense price war. Just this week, Xpeng released its mass-market Mona M03 with models that start at less than US$17,000. In May, Chinese brand Nio launched a lower-cost brand, Onvo, with cars priced $4,000 cheaper than Tesla’s Model Y.

Earlier in March 2024, Xiaomi released its SU7 at 215,900 yuan ($30,408) to beat Tesla’s Model 3 pricing at 245,900 yuan ($34,676). Xiaomi CEO Lei Jun acknowledged at the time that the prices meant that each car would be sold at a loss.

As Chinese EV makers continue releasing new models at a cheaper price, it seems increasingly harder for the American-automaker to maintain its competitive edge. A 2024 U.S. Initial Quality Study released in June this year showed that Tesla was losing its lead even over legacy automakers due to quality concerns.

On the other hand, Tesla has gotten off relatively easier for EU-imposed tariffs on its China-imports at 9% compared to Chinese automakers, in particular against the hefty 36% imposed on SAIC.

Tesla’s China Model Y prices have not changed for nine consecutive weeks.

In July, Zeekr sold 15,655 cars, a 30% year-on-year growth, while Tesla sold 46, 227 cars, an year-on-year rise of 47%.

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

—CNBC’s Evelyn Cheng contributed to this report.