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Tesla officially launches Model 3 in China, announces cheaper version coming

Tesla has now officially launched Model 3 in China with the first Model 3 Performance starting to reach the country, but the company is also opening orders for the cheaper version of the Model 3 in the market.

Last month, Tesla started taking orders for Model 3 in China, but only for the more expensive Performance and Long-Range Dual Motor All-Wheel-Drive versions were made available.

The Model 3 Performance is just now starting to officially arrive in the country.

It starts at RMB 560,000 (~$83,000 USD), which is significantly higher than in the US, where the vehicle is made.

In a new press release, Tesla China is now announcing that they are opening orders for the less expensive Model 3 Long-Range rear-wheel-drive version (translated from Chinese):

“After the Model 3 Performance all-wheel drive version and the Long-Range all-wheel drive version were officially opened in mainland China in early January 2019, today, Tesla announced that the Model 3 Long-Range rear-wheel drive version will also officially land in mainland China. From now on, consumers can log in to Tesla China official website or go to the Tesla Direct Experience Center to make reservations and configurations. The Model 3 Long Range rear-drive version will have a Chinese standard cruising range of no less than 600 kilometers “, starting at RMB 433,000 . The arrival of this model provides another cost-effective choice for Chinese consumers.”

In the configurator, customers can place an order right now, but Tesla says that the vehicle is going to arrive in March.

RMB 433,000 is the equivalent of ~$64,400 USD while this version of the Model 3 starts at $51,000 in the US.

China is an important market for every automaker, but the current trade tensions have made it a difficult market for foreign automakers without manufacturing capacity in the country.

Tesla is one of those but it plans to change that with Gigafactory 3 in Shanghai.

During a conference call with analysts earlier this week, CEO Elon Musk explained why they need the factory to reduce the price of the vehicle in China:

“Well, we need to bring the Shanghai factory online. I think that’s the biggest driver for getting to 500,000+ [vehicles] a year. Our car is just very expensive going into China. We’ve got import duties. We’ve got transport costs. We’ve got higher-cost labor here [in Fremont]. And we’ve never been eligible for any of the EV tax credits. A lot of people sort of dependent on incentives. In fact, we have the EVs with the least access to incentives. It’s pretty crazy because there are so many countries that have put price caps on the EV incentive, which affects Tesla. And in China, which is the biggest market for EVs, we’ve never had any subsidies or tax incentives for vehicles.”

The CEO still mentioned that the demand remains strong in the country.

Electrek’s Take

It’s somewhat interesting that Tesla is launching the Model 3 Long-Range rear-wheel-drive in China before Europe.

Logically, it would mean that Tesla quickly went through the demand for the higher priced version in the country and it needs the lower priced version in order to maintain demand.

It would mean that Tesla wasn’t able to get that many orders for Model 3 Performance and Long-Range Dual Motor All-Wheel-Drive versions in China.

I would be curious to know how many cars it was in total.

The good news is Tesla is bringing back the Long-Range rear-wheel-drive, which went away in North America when Tesla introduced the Mid-Range battery pack.

Hopefully, it means that it will also be launched in Europe when Tesla needs to go down market there too.

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