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

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,

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,