Tesla Inc cut the starting price of its China-built Model 3 sedans by 9 percent as it steps up efforts to lure customers in the world’s biggest electric vehicle (EV) market after opening a factory on the outskirts of Shanghai.
The price was lowered to 323,800 yuan (US$46,500) from 355,800 yuan. After subsidies from the Chinese government, prices start from 299,050 yuan, Tesla’s Web site showed. That puts the vehicles closer to some produced by domestic EV makers, such as Xpeng Motor’s (小鵬汽車) latest P7 sedan, which starts at 240,000 yuan. NIO Inc’s (蔚來公司) electrified SUVs start from as high as 358,000 yuan.
California-based Tesla, which handed over the first of its Chinese-made vehicles to 15 employees on Monday, is to start delivering local models to the public on Tuesday next week, it said on WeChat.
That is just one year after breaking ground at the Shanghai plant, Tesla’s first factory outside the US.
“This price cut shows Tesla’s confidence in cost control and determination in rapidly expanding its market share,” said Yale Zhang (張豫), managing director of Autoforesight, a Shanghai-based consultancy.
Elon Musk’s company is also lowering the cost of optional extras, from body color to high-performance wheels, a Tesla statement said.
Home-charging services are not included and cost an extra 8,000 yuan.
Tesla is already assembling more than 1,000 vehicles a week at its China facility and plans to double that rate this year, according to Song Gang (宋鋼), the plant’s manufacturing director.
Musk has said that weekly production of 3,000 vehicles in Shanghai is a target.
Tesla plans to increase local sourcing to 100 percent in Shanghai by the end of the year, from about 30 percent now, Song said.
That should help lower costs as Tesla and other ambitious EV makers face a challenging market in China, where auto sales have been slowing.
Last month, people familiar with the matter said localization would help Tesla cut prices this year by 20 percent or more.
The company has been exempted from a 10 percent purchase tax for its locally built sedans, posing more of a threat to the likes of NIO, Xpeng and BYD Co (比亞迪).
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