Tesla Begins Taking Orders for a Lower-Priced Model 3 in China

Tesla Begins Taking Orders for a Lower-Priced Model 3 in China

Author: FutureCar Staff    

Customers in China looking to purchase a Tesla Model 3 can place their orders beginning today. Electric automaker Tesla said it will start taking orders in China for a lower-priced version of its mass-market electric car.

The electric carmaker said in a statement that Chinese customers will be allowed to place orders for a long range, rear-wheel-drive Model 3 variant whose price will start at 433,000 yuan ($64,300.56). Tesla is looking to boost sales in China after amid trade tensions between Beijing and the Trump administration.

Previously, the starting price for a Model 3 in China was 499,000 yuan ($73,981.82), for an all-wheel-drive long range version. Last year, Tesla lowered prices in China in preparations for the import tariffs to be reduced from 25 to 15 percent. However that never happened.

The Chinese government instead raised tariffs to 40 percent when President Trump slapped tariffs on $50 billion worth of Chinese imports. However, Beijing agreed to suspend the increase while trade negotiations continue.

After a December meeting with Chinese president Xi Jinping and U.S. President Trump at the G20 Summit in Argentina, China agreed to lower the tariffs 25 percent back down to 15 percent for 90 days beginning on Jan 1 amid ongoing negotiations.

The U.S has a 2.5 percent duty on imported vehicles.


The Tesla Model 3

China is the world's biggest auto market. Tesla said earlier this year that it plans to start delivering Model 3 cars to customers in China in by March.

Tesla currently imports all the cars it sells in China built at its Fremont, California assembly plant but is in the process of building a factory in Shanghai that will build Model 3's when it first opens. Musk added that its Fremont factory is focused almost entirely on building Model 3's destined for China and Europe.

In an earnings call this week, Tesla CEO Elon Musk said the factory in China is "going up like lightning" and should be operational by the end of this year. Tesla said its aiming to build 3,000 Model 3 vehicles per week at its Shanghai factory.

"It's very important to get those cars, especially to China, as soon as possible. We hope the trade negotiations go well, but it's not clear. But we need to get them there while there's sort of a de facto - sort of a truce on the tariff war," Musk said.

According to Reuters, Tesla has sent two cargo ships and at least one plane with Model 3 vehicles to China, a logistics source familiar with the matter said.

Tesla said in October that its China sales have decreased dramatically after Beijing raised tariffs on imports of U.S. autos to 40 percent in July. An official from the China Passenger Car Association said data showed Tesla sold just 211 cars in the world's largest auto market in October 2018.

Tesla has adjusted prices of its U.S.-made cars in China to keep its cars affordable, a move also aimed at helping Tesla to fend off competition from rising electric vehicle startups such as Nio and Byton.

FutureCar Staff
FutureCar Staff
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