With Tesla plowing ahead on construction of its new factory to build Model 3s in China, the EV maker is looking to ensure that the market will be solid enough to keep the vehicles in demand once they start spitting them out of the plant.
Well, it is an American car company and how do American automakers draw the attention of buyers in a soft market? They make their vehicles cheaper. So, CEO Elon Musk is slashing prices in China!
Perhaps “slashing” is too harsh a word, but the company is cutting 13% off the standard Model 3, which means it comes in at about $47,000. The carmaker has been building a factory in China since January where it its initial output will be Model 3 cars. Pre-orders for the vehicles will also start on Friday, the company said on its website.
The “standard range plus Model 3” is 49,000 yuan cheaper than China’s current cheapest version. Despite this, the vehicle is facing a special challenge: it may not be green enough to qualify for China’s subsidies for new energy vehicles.
(Musk cheers as Tesla closes in on production record. Click Here for the story.)
Starting prices for five different versions of China-made Model 3s range from 328,000 to 522,000 yuan. Customers can expect to receive the car in 6-10 months, the company said in a press release. The higher-end version of the Model 3 will still be shipped from the United States.
Building the low-end model in China now help the EV maker potentially escape any restrictive tariffs that may arise out of escalating trade talks between the U.S. and China. In fact, it’s likely the price drop accounts for the minimum tariff already applied to U.S. vehicles imported into China.
(Click Here for more about “hardcore” belt-tightening Tesla’s Musk says is a must.)
Tesla also noted that buyers will only need to put down a deposit of 20,000 yuan for the Model 3 and that financing options could mean monthly payments starting from 1,100 yuan.