Tesla launched a revamped version of its Model Y in China.

Tesla on Friday announced a revamped version of its popular Model Y in China, as the U.S. electric car giant looks to fend off challenges from domestic rivals.

The Model Y will start at 263,500 Chinese yuan ($35,935), with deliveries set to begin in March. That is 5.4% more expensive than the starting price of the previous Model Y.

A spokesperson for Tesla China said that the new Model Y is only open for pre-sale in the Chinese market, rather than being launched globally.

Tesla’s Model Y refresh comes after the auto giant this month reported its first ever annual decline in overall deliveries for 2024.

Elon Musk’s electric vehicle firm is facing heightened competition around the world, from startups and traditional carmakers in Europe. In China, the company continues to face an onslaught of rivals from BYD to newer players like Xpeng and Nio.

Tesla is offering a number of incentives for customers to buy the Model Y including a five-year 0% interest financing plan.

The new Model Y can accelerate from 0 kilometers per hour to 100 kilometers per hour in 4.3 seconds, Tesla said, exceeding the speed capabilities of the previous vehicle. The Model Y Long Range has a further driving range on a single charge versus its predecessor.

Tesla has not introduced a new model since it began delivering the Cybertruck in late 2023, which starts at nearly $80,000.

Investors have been yearning for a new mass-market model to reinvigorate sales. Tesla has previously hinted that that a new affordable model could be launched in the first half of 2025.

Despite Tesla’s headwinds, the company’s stock is up nearly 70% over the last 12 months, partly due to CEO Musk’s close relationship with U.S. President-elect Donald Trump.