Tesla Wants To Slash Model 3 Prices In China

Tesla is said to be considering slashing the price of Chinese-built Model 3s for the local market next year, The Los Angeles Times reports.

With Tesla’s long-awaited Gigafactory just outside of Shanghai now operational, people close to Tesla claim the automaker could cut Model 3 prices by 20 per cent or more next year in a bid to drum up buyers despite the Chinese car market slowing.

It is understood that Tesla will drop Model 3 prices by using more local components meaning it’ll need to import fewer parts and avoid many tariffs. As it stands, prices for Chinese-built Model 3s start at 355,800 yuan ($50,800) although that sum will probably be lowered from the second half of the year.

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“People shop on price — this will help grow the market share of electric vehicles,” founder of Shanghai consulting firm Automobility Ltd, Bill Russo said. “This will also force the competing products to make adjustments.”

If prices for the Tesla Model 3 are indeed cut by 20 per cent, the car could start at under 300,000 yuan. By comparison, Xpeng’s new P7 sedan will be priced between 270,000 yuan and 370,000 yuan while the larger Nio ES6 SUV starts at 358,000 yuan.

While lower prices could attract more buyers in the long-run, Russo claims that it could hurt the company’s initial sales as shoppers hold out for cheaper prices.

By the end of 2019, Tesla is expected to be building at least 1,000 examples of the Model 3 per week at its Shanghai facility. Eventually, it is hoped that 3,000 units will be produced weekly.