On May 31, Tesla announced that it will produce the Model 3 standard range version at the Shanghai Gigafactory in China. The vehicle is now also officially available for pre-orders.
The standard range Model 3 has a cruising range of 460 km and sells at 328,000 yuan (~$47,450). It is 49,000 yuan cheaper than the imported version. The price drop allows Tesla products to reach a greater span of Chinese consumers. As a more affordable model, the Model 3 is more compact, has a more simplistic design and is more cost-effective. Other than giving Chinese consumers the opportunity to join the Tesla family, the newly launched model also brings Tesla one step closer to their goal of “accelerating the advent of sustainable transport”.
Producing cars locally could help Tesla minimize the impact of the U.S.-China trade war, which has forced the carmaker to adjust prices of its U.S.-made cars in China. Keeping the prices down will also make Tesla a fierce competitor in the domestic EV market where it has to keep up with startups such as Nio and XPeng Motors.
The starting prices for five different versions of the China-made Model 3 cars range from 328,000-522,000 yuan ($47,450-$75,509). The higher-end version will still be imported from the United States. Investors are focused on whether the gross profit margin on the Model 3 will remain at around 20 percent in China.
With the initiation of the domestic production of the Model 3, more and more Chinese car owners are expected to join Tesla’s green team and contribute to the sustainable development of the planet.
Featured photo credit to Tesla