- Tesla on Friday announced that its Model 3 sedans produced in China would start at about $US47,500 there.
- That’s about 13% less than the lowest price currently offered to Chinese consumers for the vehicles, which are shipped from the US.
- More expensive versions of the sedan will run as high as $US75,550.
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Tesla on Friday announced that its Model 3 sedans made in China at its second Gigafactory, still under construction in Shanghai, would cost about 13% less than the sedans it’s currently exporting for sale in the world’s largest car market.
The company said the Chinese-made standard-range-plus version of the Model 3 would start at 328,000 yuan, or approximately $US47,500, in China. That’s 49,000 yuan, or $US7,000, less expensive than the lowest price consumers are paying for Model 3s shipped from the US. More expensive trims will cost up to 522,000 yuan, or $US75,550, for the performance version.
China is key to Tesla’s long-term strategy, especially given concerns from some Wall Street analysts that demand in markets such as the United States may be waning. CEO Elon Musk noted after the company’s first quarter that cars would be cheaper to produce in China.
“Learning from our experience, we can now build a second-generation Model 3 line in China that we expect will be at least 50% cheaper per unit of capacity than our Model 3-related lines in Fremont and at Gigafactory 1,” he wrote in a quarterly update letter. “Our Model Y manufacturing capacity will have the same simplicity as the line planned for Gigafactory Shanghai.”
Adam Jonas, an analyst at Morgan Stanley, said recently that a lower-price model in China would be key to continued growth.
“Our China Auto team is extremely constructive on the outlook for Tesla to gain share with a domestically sourced Model 3 and Model Y,” he said in a note to clients this week. “We believe the 2019 air-pocket in Model 3 demand may largely continue until an affordable, locally produced Model 3 is available in that market.”
Jonas also noted that he didn’t expect Tesla to begin delivering cars to Chinese consumers from its new Shanghai factory until 2020, later than the company’s forecasts.
Tesla also announced Friday that right-hand-drive versions of the Model 3 were available for preorder in markets including Australia and Hong Kong.
Shares of Tesla, already down more than 50% from their most recent highs, slid about 1.6% in early trading Friday. The stock was pointing to an open near $US185 on Friday.
More Tesla news:
- One of Tesla’s most optimistic backers explains why it’s doubling down as other investors rush for the exits
- Elon Musk tells Tesla employees in leaked email that the company needs to catch up on car deliveries before the end of the quarter
- Tesla just got slammed with a new lawsuit from a supplier that alleges the automaker hasn’t paid a $US1.7 million bill
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