Tesla eas­ing lo­cal-for­eign price gap for Model 3

Car­maker to boost sales of im­ported ve­hi­cles as Shang­hai plant pro­ceeds

Global Times US Edition - - BIZUPDATE - By Xie Jun

Tesla’s lat­est price cut for its Model 3 cars fur­ther re­duces the gap be­tween its im­ported Model 3s and those to be made in China, which one ex­pert said is meant to boost sales of the im­ported ver­sion while paving the way for fur­ther price cuts on cars made in China.

Tesla rolled out the price cut as it mounts ef­forts to speed up the con­struc­tion of its Gi­gafac­tory 3 lo­cated in subur­ban Shang­hai.

Ac­cord­ing to a re­port of thep­a­per.cn on Wed­nes­day, the Gi­gafac­tory 3’s con­struc­tion speed ex­ceeds ex­pec­ta­tions and the fa­cil­ity will be able to put cars onto the mar­ket by the end of this year.

On Tues­day, Tesla im­ple­mented across-the-board price cuts. It re­duced the price of the Model 3 stan­dard range plus rear-wheel drive model from 377,000 yuan ($54,800) to 355,900 yuan. The price of the made-in-china ver­sion re­mained un­changed at 328,000 yuan.

Tesla also cut price on some of Model S and Model X cars.

Wang Hao, Tesla China’s gen­eral man­ager, said that af­ter the re­duc­tion, the prices of im­ported and made-in-china Model 3s would be al­most the same. “Tesla wants to let Chi­nese con­sumers join the league of elec­tric car users at a faster speed,” he was quoted by thep­a­per.cn as say­ing dur­ing a press con­fer­ence on Wed­nes­day.

“Now many Chi­nese cus­tomers are post­pon­ing their buy­ing plans to wait for the cheaper made-in-china Model 3s to come out, as most Model 3 buy­ers in China are still sen­si­tive to price,” Feng Shim­ing, a vet­eran car in­dus­try an­a­lyst, told the Global Times on Thurs­day.

“Tesla wants to cut this wait­ing pe­riod by meth­ods such as speed­ing up con­struc­tion of its Shang­hai plant and re­duc­ing the price gap be­tween cars made at China and abroad,” he said.

The re­cent price cuts for Model 3s should also “pave the way” for later price cuts of made-in-china cars, he said. “It’s gen­er­ally be­lieved by do­mes­tic cus­tomers that 328,000 yuan is too high,” Feng said.

A sales­per­son at Tesla told the Global Times on con­di­tion of anonymity on Thurs­day that the price of the made-in-china Model 3s will fluc­tu­ate, in keep­ing to man­u­fac­tur­ing costs of the Shang­hai plant and the yuan’s ex­change rate against the US dol­lar.

Tesla’s Global Vice Pres­i­dent Tao Lin was quoted by thep­a­per.cn as say­ing that the cur­rent price of the made-inchina Model 3 has taken into con­sid­er­a­tion fac­tors such as the Shang­hai plant’s op­er­a­tion sta­tus “in the long term.”

Tesla has made price cuts five times since last July, ac­cord­ing to me­dia re­ports.

The car­maker is also speed­ing up con­struc­tion of the Shang­hai plant to ac­cel­er­ate sales of its cars in China.

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