Tesla Launches ‘Cheaper’ Model 3 for China

Tesla, betting big on China's appetite for EVs, has officially launched an affordable Model 3 in China. The Chinese market is one the key cornerstone in Tesla’s plan for its Gigafactory and EV sales outside its home country. The Chinese prices should also serve as a good indicator of prices for the Indian market

Tesla has started to take orders for the cheaper version of the Model-3 in the Chinese market. Last month it had started taking orders only for the more expensive Performance and Long range Dual motor AWD versions. These vehicles were made in California and then shipped to China. It starts at RMB 560,000 (~$83,000 USD), which is significantly higher than in the US.

Interestingly, when bookings for the Model 3 first opened in 2016 for worldwide buyers, there was considerable interest and bookings from India too, with buyers putting up $1000  each for their bookings. When last heard, the Model was due to be delivered to Indian buyers in 2019.

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Now according to Tesla,”After the Model 3 Performance all-wheel-drive version and the Long-Range all-wheel-drive version were officially opened in mainland China in early January 2019, today, Tesla announced that the Model 3 Long-Range rear-wheel drive version will also officially land in mainland China. From now on, consumers can log in to Tesla China official website or go to the Tesla Direct Experience Center to make reservations and configurations. The Model 3 Long Range rear-drive version will have a Chinese standard cruising range of no less than 600 kilometers “, starting at RMB 433,000 . The arrival of this model provides another cost-effective choice for Chinese consumers.”

RMB 433,000 is roughly equivalent $64,400 while this version of the Model 3 starts at $51,000 in the US. The price difference is due to the fact that the cars attract high import duties, transport costs and higher- labor cost in Fremont. Tesla cars are also not eligible for any EV tax credits either in US or in China(yet).

Tesla said in October that its China sales have been dampened after Beijing raised tariffs on imports of U.S. autos to 40 percent in July due to trade friction between Washington and Beijing. China has however suspended the additional 25 percent tariff temporarily, reducing it to about 15 percent.

After this, Tesla adjusted prices of its U.S.-made cars in China to keep its cars affordable in the country, a move also aimed at helping it fend off competition from a swathe of domestic electric vehicle startups such as Nio, Byton or Beijing-based Chehejia or Chinese backed bigwigs like BAIC.

Tesla plans to start production at its Shanghai plant in the second half this year and is aiming to build 3,000 Model 3 vehicles per week.

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