Tesla will make a lower-cost version of its best-selling Model Y in Shanghai, three people with knowledge of the matter said, aiming to regain ground lost during a price war in its second-largest market.

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 will launch a stripped-down Model Y as its first "affordable" electric vehicle, according to a Chinese media report Thursday, while Reuters had a slightly different take Friday. Tesla stock rose slightly Friday after falling Thursday amid general market weakness.

It’s a case of "Whatever you can do, I can do better," as Honda comes for the Tesla Model Y with its own electric SUV, the S7. Honda claims that the S7, its first-ever premium electric SUV, will break new ground thanks to exceptional comfort,

The S7 will be taking on premium electric SUVs like the Tesla Model Y. It offers a driving range of over 650km on a single charge, first-class comfort, and a stylish new design. The S7 measures 4,750mm in length, 1,930mm in width, and stands 1,625mm tall. These dimensions are similar to those of the Tesla Model Y.

It looks increasingly likely that the much touted $25,000 entry level Tesla known colloquially as the Model 2 will not be built.