The update was implemented quietly, with no change in pricing, but the enhancements are significant for Tesla’s positioning in China. These changes arrive as Tesla faces mounting pressure from domestic competitors like BYD, which overtook Tesla as the world’s top EV seller.
They also come amid new tax policies and shifts in consumer incentives that are reshaping the Chinese EV market. Tesla’s Chinese sales hit an all-time high in December 2025, helped by a buying rush before the introduction of a 5% purchase tax on new EVs.
In this context, the Model Y upgrades serve not just to refine the product, but also to help Tesla maintain momentum, simplify production at Giga Shanghai, and offer a more consistent brand experience across all versions.
Larger 2K Display Introduced Across All Trims
The centerpiece of the upgrade is the new 16-inch center display, which replaces the previous 15.4-inch panel used in lower-tier versions. The updated screen, already present in the Model Y L and Performance, is now standard across the lineup.
The new screen offers a resolution of 2560×1440, compared to 1920×1200 in the previous version. Although the size increase is just 0.6 inches diagonally, the display area grows by 2.63%, from 106.59 square inches to 109.39 square inches. It also shifts from a 16:10 to a 16:9 aspect ratio and features thinner bezels, enhancing the cabin’s modern feel. The width expands to 13.95 inches, while the height slightly adjusts to 7.84 inches.
These updates bring all Model Y trims in line with Tesla’s current design language and allow for greater parts standardization across future models, including potential changes to the Model 3.
Gray Headliner Dropped in Favor of Black Interior
Alongside the display update, Tesla has also made a visible change to the cabin finish: replacing the light gray headliner with a black Alcantara-style fabric across all Model Y variants.
For years, the gray headliner was standard in entry-level trims and was frequently criticized by owners for making the interior feel less premium. The black headliner, once exclusive to the Performance version, was so sought after that many owners of Long Range models retrofitted it themselves.
Now that the gray headliner has been officially discontinued, all Model Y buyers in China receive a uniform, more premium interior, regardless of trim. The change also helps simplify Tesla’s manufacturing process, reducing complexity and contributing to a more cohesive aesthetic across the range.
$TSLA 🇨🇳 A first look at the 2026 New Model Y in China: The 15.4-inch screen has been upgraded to 16.0 inches 🆒
— Ming (@tslaming) January 6, 2026
Additionally, the interior aesthetic has been updated: the A-pillar trim, headliner, seatbelt D-rings, and sun visors have all shifted from gray to black 🔥 pic.twitter.com/lHesck5dsZ
Financing Updates and Model Y L Sales Surge
Tesla’s upgrades to the Model Y come just as the Chinese government rolled out a 5% tax on new EVs, prompting the automaker to adjust its sales strategy. In response, Tesla introduced new financing packages for buyers in China.
The company is now offering a seven-year low-interest financing plan across all of its Chinese-built lineup, along with a five-year 0% interest deal for the Model Y L specifically. These options aim to offset the effects of the tax and maintain the strong sales pace seen in late 2025.
The Model Y L, launched in summer 2025, quickly became a standout success, receiving 40,000 orders in a single day. The six-seater, long-wheelbase variant helped raise the interior and functional standard for the entire lineup. Now, with its features being shared across all trims, Tesla is effectively narrowing the perceived gap between its base and top-end versions.
Despite its popularity in China, Elon Musk has suggested that the Model Y L might never launch in the US. In a post on X in August, Musk responded to a user asking about a US release, saying: “This variant of the Model Y doesn’t start production in the US until the end of next year. Might not ever, given the advent of self-driving in America.”
As of now, the refreshed Model Y remains exclusive to China. But given Tesla’s pattern of piloting manufacturing changes at Giga Shanghai before expanding them to other factories like Giga Berlin and Giga Texas, these updates may not remain localized for long.
