Tesla cut the price of its new, longer-range Model 3 variant by nearly 4 per cent just before deliveries were set to begin, a move set to heighten competition in mainland China’s premium electric vehicle (EV) segment.
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The US carmaker said on Monday that it would price the Shanghai-made car, which boasts a driving range of 830km, at 259,500 yuan (US$36,391), 10,000 yuan lower than the price it touted on August 12. Deliveries are expected to begin this month.
The company is also offering mainland buyers of the car, and some other Tesla models, a subsidy of 8,000 yuan for buying insurance, plus a five-year interest-free loan that amounts to 20,000 yuan in savings.
The new Model 3 and a six-seat variant of the Model Y also due to begin deliveries this month aim to arrest a decline in market share by attracting wealthy Chinese customers who prefer spacious, longer-range EVs. Tesla’s share of the mainland EV market fell to 3.2 per cent in June, according to the China Passenger Car Association (CPCA). Its sales accounted for 16 per cent of the national total in 2020, when the Shanghai factory opened.
“The price reduction is a surprise move by Tesla to attract more middle-income consumers,” said Phate Zhang, founder of Shanghai-based industry data provider CnEVPost. “After all, it is facing mounting challenges from its local rivals, whose vehicles are much cheaper.”
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Tesla has long stated that it adjusts the prices of its locally built vehicles regularly based on production costs.