(Bloomberg) -- Tesla Inc. is preparing to roll out a revamped version of its smash hit Model Y from its Shanghai plant, according to people familiar with the matter, as domestic rivals accelerate product launches amid heated competition.

The US electric carmaker is currently conducting preparation work in China for its refreshed Model Y sport utility vehicle and mass production may start as soon as mid-2024, the people said, asking not to be identified because the information isn’t public.

The 2024 version of the Model Y will have much more obvious exterior and interior changes than the most-recent update in October, which added a new wheel design and ambient lighting, the people said, declining to elaborate.

The first batch of the newest Model Ys will be made from the second phase of Tesla’s Shanghai facility, which will suspend production for around a week during the New Year holiday for a partial upgrade, one of the people said. More adjustments will have to be made prior to mass production, they added.

A representative for Tesla in China declined to comment.

Established in 2019, Tesla’s Shanghai factory now produces over half of the electric carmaker’s global deliveries. First rolled out in 2020, the Model Y has proven extremely popular, now ranking among the best-selling EV models worldwide. In China, deliveries of the Model Y accounted for almost 75% of Tesla’s overall sales in the country, data compiled by Bloomberg Intelligence shows.

Tesla’s domestic rivals, including established automakers like BYD Co. and newer entrants such as Xpeng Inc., are unveiling a slew of new vehicles to increase share across various market segments. Shenzhen-based BYD is poised to surpass Tesla as the new worldwide leader in fully electric car sales — likely in the current quarter.

Earlier this year, Tesla revamped its six-year-old Model 3 sedan with a sleeker look and longer range to attract customers.

China’s total sales of new-energy vehicles, which includes plug-in hybrids and pure-electric cars, climbed 40% in November from a year earlier — and 8.9% from October — to 841,000 units, according to data released by China’s Passenger Car Association earlier this month.

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