China’s BYD, the world’s biggest electric vehicle maker, has launched a challenger to Tesla’s Model 3, at about half the price, at a time when Tesla’s sales in the world’s biggest auto market are declining.

BYD also launched a high-end flagship SUV under its Denza brand to compete with BMW and Mercedes-Benz.

BYD’s Qin L EV sedan has a starting price of 119,800 yuan ($16,516, £12,798) compared to 235,500 yuan for a basic Model 3.

Qin L EV sedan

The Qin L offers 545km of driving range compared to 634km for the Model 3, while both feature a digital cockpit and basic self-driving features.

The launch comes at a time when the Model 3, long the best-selling electric sedan on the Chinese mainland, faces challenges from Xpeng’s Mona M03 and Xiaomi’s SU7, as well as progressive rounds of price-cutting.

Tesla’s overall mainland sales fell to 30,688 units in February, down 51.5 percent from January and 49.2 percent year-on-year.

Meanwhile Xpeng said it sold more than 15,000 units of the M03 sedan in February after launching it late last year, and the SU7 sedan from Xiaomi has outsold Tesla’s Model 3 on a monthly basis since December.

Sales of Tesla’s Model Y, a crossover SUV that was China’s best-selling car in 2023 and 2024, are also facing pressure from domestic rivals.

The company is planning to make a less-expensive variant of the Model Y to help stem its loss of sales in mainland China, Reuters reported earlier this month.

Denza N9 SUV

BYD also launched the high-end Denza N9 SUV, under the Denza brand that it initially founded as a joint-venture with Mercedes-Benz, before buying out its partner.

The six-seat vehicle is available as pure-electric or plug-in hybrid models and includes the God’s Eye self-driving system.

“We hope to prove to the world that China cannot only produce good cars, but also gain a foothold in the luxury market,” said BYD chairman and founder Wang Chuanfu.

Global brands dominated China’s luxury car sales until domestic firms Li Auto and Xpeng achieved a foothold last year.

Mercedes-Benz sales fell 6.7 on the mainland last year and BMW saw sales drop 13.4 percent.