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Tesla Slashes Price in China

2019-01-21 14:52 Monday


It seems that there is going to be a cease fire in the trade war between China and US. Once the war is over, heavy tariffs on vehicle products may return to a normal state. The promising of cease fire is now affecting the price of the Tesla Model 3. Tesla is reducing the price of Model 3 by over 7% in China.

Tesla

In the early stage of trade war, Tesla CEO Elon Musk even talk directly to Donald Trump to seek for the cease-fire of US-China car trade. Considering the 40,000 to 90,000RMB (~$6,000 to ~$14,000 USD) price slash of Tesla in China, people all thought that Tesla's discussion with Trump was fruitful.

But it backfired as the trade war started to intensify in July, and Tesla has to undertaken 40% import duties for the vehicles it delivers in the country from California, resulting in an at least $20,000 price increase for Model S and Model X in China.

China recently confirmed that the additional tariffs on US vehicles and auto parts will be temporarily lowered, and the policy will take effect from January 1, 2019. It means that the tariffs will go back down to 25% in the early of 2019.

As a response to the new policy, Tesla adjusted the price of Model 3 in China again. When Tesla first opened orders for Model 3 in China, the bottom price started at 580,000 RMB. But now the price has been slashed down to at least 499,000 yuan (~$72,000). The automaker is expected to start Model 3 deliveries in China around the end of the first quarter 2019.

In fact, this isn't the first time for Tesla to slash vehicle price in China. In November, the company cut prices of Model X and Model S vehicles by 12-26% in China. The potential truce on U.S.-manufactured cars and light trucks prompted Tesla to reduce its vehicles price in China.

China possesses a huge market for EV manufacturer like Tesla. However, Tesla's high dependence on imports hindered its growth especially in the wake of uncertainties between China and US. The company plans to build factories and manufacture vehicles in China by 2019.

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