Caixin
Oct 02, 2020 02:10 AM
BUSINESS & TECH

Tesla Further Slashes Price of China-Made Model 3

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What’s new: Tesla Inc. further cut the price of its Shanghai-made Model 3 electric car to 249,900 yuan ($36,800) after government subsidies, bringing the starting price of Tesla’s most-affordable model down by almost 10%.

A Model 3 car with an extended range of 668 kilometers will start at 309,900 yuan, also down 10% from the May price, Tesla said Thursday on its website.

This is the third price cut by Tesla this year, showing the Silicon Valley electric-car maker’s strategy to compete with Chinese contenders with cheaper models, such as those made by Xpeng and BYD.

The background: In April, China extended subsidies and tax exemptions for locally made new-energy vehicles for two years but set the threshold at cars costing less than 300,000 yuan, putting pressure on Tesla to cut the price of its Shanghai-made Model 3 below the threshold to qualify for subsidies.

Tesla started delivering China-made Model 3 sedans in January. In August, Tesla’s Model 3 maintained its position as China’s most-sold electric car, with 11,811 deliveries in the country, a 7.2% increase from July, according to statistics provided by the China Passenger Car Association (CPCA).

At Tesla’s 2020 annual shareholder meeting Sept. 22, Tesla Chief Executive Officer Elon Musk said the Shanghai factory could eventually produce 1 million vehicles a year. There have been reports that the Shanghai factory is developing a smaller and more affordable auto than the Model 3.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)

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