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 popped Friday morning after falling Thursday amid general market weakness.

Tesla China is working on a cheap Model Y variant that might launch later this year to boost demand if the refreshed Model Y sales disappoint

Not too long ago, Tesla had much of China’s new EV market to itself, but as local rivals like BYD are on their way to becoming international juggernauts, the American brand is now facing more competition than ever before. To combat this, Tesla’s Chinese division has reportedly developed a new, lower-priced version of the Model Y.