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The carmaker has been building a factory in
China since January where it its initial output will be Model 3
cars. Pre-orders for the vehicles will also start on Friday, the
company said on its website.
The "standard range plus Model 3" is 49,000 yuan cheaper than
China's current cheapest version, also standard range plus, even
though it remains unclear whether the carmaker will qualify for
China's subsidies for new energy vehicles.
The starting prices for five different versions of China-made
Model 3s range from 328,000 to 522,000 yuan. Customers can
expect to receive the car in 6-10 months, the company said in a
press release.
It also said buyers will only need to put down a deposit of
20,000 yuan and that financing options on offer meant that
monthly payment instalments will start from 1,100 yuan.
"The price drop is to make Tesla more accessible," it said.
The higher-end version of the Model 3 will still be imported
from the United States.
Investors are focused on whether the gross profit margin on the
Model 3 will remain around 20% in China.
CRUCIAL PRODUCTION
Doubts about the Model 3's production rate and sales performance
have hit Tesla's share price in recent months.
Producing cars locally is likely to help Tesla minimize the
impact of Sino-U.S. tit-for-tat import tariffs, which has forced
the EV maker to adjust prices of its U.S.-made cars in China.
Keeping prices in check will also help Tesla fend off
competition from a swathe of domestic EV startups such as Nio
Inc, Weltmeister and XPeng Motors, as well as established
carmakers including Volkswagen AG and General Motors Co.
Tesla's so-called Gigafactory is China's first wholly
foreign-owned car plant and is seen as a reflection of the
country's broader shift to open up its car market.
Pictures of the Shanghai plant posted on Tesla's social-media
account showed construction of its main section was nearly done.
The company also held a recruitment event this week for car
manufacturing and logistics workers.
Tesla forecast its deliveries in 2019 would reach 360,000 to
400,000 vehicles and said it may produce as many as 500,000
vehicles if its China factory reaches volume production in the
fourth quarter.
(Reporting by Yilei Sun in Beijing and Brenda Goh in Shanghai;
Editing by Stephen Coates and Christopher Cushing)
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