Tesla gets a second wind in China after slashing 20 per cent off the price of its shorter-range Model Y all-electric SUVs
- Customers must wait until September to receive their standard range Model Y SUVs, according to Tesla’s sales manager
- The standard range sells for 276,000 yuan after subsidies, 71,900 yuan cheaper than the version with the extended range
Tesla’s Model Y electric sports-utility vehicle is getting a second wind in China after the carmaker promised owners up to 20 per cent in savings with its shorter-range version, prompting its Shanghai factory to rev up production to meet demand.
Customers must wait until September to receive their standard range Model Y SUVs, with a sticker price of 276,000 yuan (US$42,700) after subsidies, 71,900 yuan cheaper than the version with the long range, according to Tesla’s sales manager at the HKRI Taikoo Hui shopping centre on Shimen Yi Road in Shanghai.
Tesla would not disclose its local sales and production details, but automotive industry officials and analysts said the Gigafactory 3 in Shanghai’s Lingang free-trade zone had already received thousands of orders for the cheaper version of Model Y and buying euphoria surrounding the car would continue.
“Model Y’s standard range version is a game changer because it is likely to lure tens of thousands of buyers,” said Gao Shen, an independent analyst in Shanghai. “It will also lure many owners of internal-combustion engine cars to switch” to electric vehicles, he said.
The standard range Model Y, fitted with a lithium iron phosphate (LFP) battery pack made by Contemporary Amperex Technology (CATL) in the Fujian provincial city of Ningde, can go for as far as 525km (326 miles) on a single charge, compared with the 595km mileage on the extended range model using lithium nickel manganese cobalt oxide (Li-NMC) battery.
The switch down range is in line with the trend of younger drivers ditching petrol-guzzling vehicles for all-electric smart cars that are equipped with a range of features from semi-autonomous driving to self-parking and voice-activated controls.
One in four of every new vehicle on the roads of China – the world’s largest market for electric cars and petrol-powered vehicles – will be powered by electricity by 2025, translating to a six-fold jump in sales to 6.6 million new vehicles, according to UBS’ forecast.
“Tesla’s leading position in China will be consolidated by the standard range version,” said Chen Jinzhu, CEO of Shanghai Mingliang Auto Service, which sells car insurance and second-hand vehicles. “The price is attractive to many white-collar company employees who consider buying an EV.”
The standard range version enjoys a cash subsidy of 18,000 yuan as Beijing offers subsidies to buyers of EVs priced below 300,000 yuan. The long-range Model Y, which is more expensive, does not qualify for this subsidy.
In the first half of this year, Tesla’s Shanghai factory delivered about 160,000 Model 3 and Model Y vehicles in China, accounting for 15 per cent of the mainland’s total.
China sales represented 42 per cent of Tesla’s global total. Tesla is also expected to deliver its China-built Model Ys to European customers in a few weeks, according to the German news agency dpa International.
In China, Tesla is facing suspicion about the quality and safety of its Shanghai-made cars. Last month, it recalled more than 285,000 of these cars because of safety concerns about their cruise control function.
In March, the Chinese military banned Teslas from its facilities because of concerns about cameras installed in the cars. A month later, under pressure from Chinese regulators, the carmaker released the data log of a Model 3 that crashed in February in the country’s central Henan province to the car owner.
