Tesla cuts the price of China-made Model 3 cars by 9 per cent to compete with home-grown brands in world’s No. 1 car market

The price of Model 3 cars with a standard-range battery pack has been lowered to 323,800 yuan from 355,800 yuan, according to Tesla’s website

After the Chinese government’s 25,000-yuan subsidy, a Model 3 vehicle starts from 299,050 yuan, pricing it between NIO’s electric SUVs at 358,000 yuan, and Xpeng Motor’s P7 at 240,000 yuan

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A Tesla Inc. Model 3 vehicle set to be delivered to a company employee moves off an assembly line during a ceremony at the company's Gigafactory in Shanghai on Monday, December 30, 2019. Photo: Bloomberg

Published: 3:14pm, 3 Jan 2020Updated: 11:17pm, 3 Jan 2020

Tesla has cut the price of Model 3 cars rolling off its first offshore Gigafactory in Shanghai, as it reduces the premium of its bestselling electric vehicles to compete for the affection of China’s budget-conscious owners in the world’s largest car market.

The price of a Model 3 with a standard-range battery pack has been lowered to 323,800 yuan (US$46,500), from 355,800 yuan, according to Tesla’s website, compared with NIO’s electric SUVs at 358,000 yuan, and Xpeng Motor’s P7 at 240,000 yuan. After the Chinese government’s 25,000-yuan subsidy, a Model 3 car starts from 299,050 yuan.

“A Tesla with the price tag of lower than 300,000 yuan is believed to be very attractive to Chinese car buyers,” said Gao Shen, a Shanghai-based independent manufacturing sector analyst. “The price cut is set to fuel competition in the country’s high-end electric vehicle market.”

The aggressive pricing, adding to the 10-per cent tax exemption offered by Shanghai’s local authorities, gives California-based Tesla a leg up in China, where it completed building its first factory outside the US a year after breaking ground. The first of the vehicles to roll off the Lingang assembly were shipped to 15 employees on December 30, while deliveries to customers would commence on January 7.

The US$2 billion Lingang factory is expected to make about 3,000 Model 3s a week initially, ramping up to 500,000 per year when it becomes fully operational.

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