Tesla Starts Accepting Orders for Lower-Priced Model 3s Made in China

David Paul Morris/Bloomberg News

Tesla Inc. started taking orders for Model 3 cars to be made in China, lowering prices for the vehicle as it seeks to double down on a market it expects to drive future growth and revenue.

The Palo Alto, Calif.-based company set the base price at 328,000 yuan ($47,523), including value added taxes, according to a statement May 31. The sedans, to be built at Tesla’s Gigafactory in Shanghai, will have a range of 286 miles per charge and probably will be delivered in six to 10 months. The car is 49,000 yuan cheaper than the imported version.


Tesla CEO Elon Musk (Qilai Shen/Bloomberg News)

“The price drop makes Tesla more accessible,” the company said in a Chinese-language statement. Tesla will introduce V3 Superchargers in China by the end of this year, it said. The new technology will cut charging times to around 15 minutes, Tesla said in a blog in March.

Tesla currently ships all its cars from the United States, making them ineligible for Chinese government subsidies and subjecting them to import tariffs. The company is counting on its Shanghai factory, which is slated to begin production this year, to bolster competitiveness in a country crowded with hundreds of electric vehicle rivals.

The need for Tesla to expand beyond the United States was highlighted by its latest quarterly results, which missed analysts’ projections. The halving of a federal tax incentive for Tesla purchases starting in January dragged on U.S. demand in the quarter, and Tesla struggled to offset that drop by starting deliveries of the Model 3 in Europe and China.

Local production in China, the world’s largest auto market, not only will allow Tesla to avoid import duties amid trade war tensions but also speed up deliveries, a priority flagged by CEO Elon Musk. A 31% quarter-on-quarter drop in deliveries in the first three months contributed to a 43% plunge in Tesla shares this year.

Separately, Tesla tweeted the Model 3 now can also be ordered in Australia, Hong Kong, Japan, New Zealand, Ireland and Macau.