Following the delivery of the first batch of Chinese-manufactured Model 3 cars, Tesla has slashed the starting price of its Model 3 by 16% to 299,050 yuan ($42,900) from 355,800 yuan ($51,000). The cut was made possible by a combination of Tesla lowering the price and the Chinese government offering a subsidy.
While the firm has also sold 15 Model 3 vehicles to Tesla employees, members of the public will begin receiving their cars on January 7. All of the vehicles are rolling off the Shanghai-based Gigafactory 3 production lines and in the coming weeks and months Tesla will be looking to ramp up production here so that 3,000 vehicles are produced each week, currently, 1,000 vehicles are produced per week.
With the latest price reduction, Tesla’s Model 3 is more competitive with domestic EVs such as the Xpeng P7 sedan which starts at 240,000 yuan. Tesla is by no means the most expensive manufacturer in the market; NIO Inc sells electric SUVs starting from 358,000 yuan.
In addition to reducing the cost of the Model 3, Tesla is also lowing the cost of optional extras such as body colour and high-performance wheels. With the lower costs, Tesla will be hoping that it can use the Chinese market to help it meet goals set by analysts. Back in October, the firm reported that it has missed Wall Street targets which caused shares to fall.