In a bid to regain market share in China, Tesla (NASDAQ:TSLA) is reportedly developing a lower-cost version of its best-selling Model Y in Shanghai. Citing people with knowledge of the matter, Reuters reported that the new model will be more compact and at least 20% cheaper to manufacture than the refreshed Model Y,

Tesla has lost share to Chinese competitors, while Elon Musk’s political activities have led to steep declines in Tesla sales in Europe.

Key Takeaways Tesla is set to produce and launch a lower-cost Model Y vehicle in China likely in 2026, Reuters reported Friday—citing people with knowledge of the matter.The vehicle will also eventually be launched in Europe and North America,

Tesla has plans to produce a low-cost version of its best-selling Model Y to boost sluggish sales in China, according to a report. The car will cost at least 20% less to produce than the version launched last year,

Telsa plans to make a slightly smaller Model Y that costs at least 20 percent less to build than the recently refreshed Model Y.