A Little Trouble in Big China? Tesla Prices Model 3 for Upmarket Tastes

Matt Posky
by Matt Posky
a little trouble in big china tesla prices model 3 for upmarket tastes

Eager to minimize import costs, Tesla has made impressive progress laying down roots in China. The company secured a long-term lease on a 210-acre site near Shanghai in October of 2018. Ground was broken at the start of January, with the $5 billion facility estimated to begin producing cars as early as this November. While all of this effort was aimed at expanding the brand in Asia while minimizing costs, it’s not translating into a cheaper Model 3 for the Asian market.

Tesla, being Tesla, has decided to launch the Model 3 with a starting MSRP of $50,000. According to Bloomberg, that’s only 3 percent less expensive than the versions it had to ship across the ocean. Rather than attempting to build more budget-conscious variants, the automaker decided to offer all vehicles sold in China with Autopilot and additional standard content.

From Bloomberg:

The first Tesla vehicles to be produced outside the U.S. are part of Chief Executive Officer Elon Musk’s efforts to expand in Asia and take on local electric-vehicle upstarts. The pricing suggests Musk is trying to maintain Tesla’s premium image in the world’s largest auto market, leaving local competitors to compete for buyers of cheaper EVs.

“It might affect the choices of some potential customers, but not much,” said Yale Zhang, the founder and CEO of consultancy AutoForesight. “The product’s target group is not that price-sensitive compared with those choosing much cheaper ones.”

While the Model 3 can be sourced in America below $40k, those exported to China typically cost $51,500. There’s no way there aren’t a few thousand Chinese shoppers that will be disappointed to learn their home-grown variants will be priced roughly the same — even if they come with a bit more content. But this is Tesla, a company that likes to lead with its more-extravagant products. Asia probably should have seen this coming.

Will the strategy play for the first foreign-controlled automotive assembly plant in China? Maybe. Leaning upon pricier models seems to have worked for Tesla in the past, but the company faces a lot more electrified competition in the PRC. Government influence has created countless EV brands in China and encouraged established carmakers to embrace electrification more than they have in the West.

Bloomberg noted that local rivals will be able to undercut Tesla’s pricing by significant margins, with even the higher-end firms remaining competitive. For example, NIO sells the all-electric ES6 crossover for around $47,800 in China. It’s quite a big bigger than the Model 3 while offering similar range and its own unique traits ( like a cute digital assistant). That could force Tesla to go all in on its premium image, hoping that China responds favorably.

Tesla claims Chinese-made variants of the Model 3 will go on sale in the first quarter of 2020 — all of them with Autopilot.

[Image: B.Zhou/Shutterstock]

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  • MBella MBella on Oct 27, 2019

    Don't make at premium cars cost 3 times as much over there compared to the US? Wouldn't that make the Tesla a bargain?

  • ToolGuy ToolGuy on Oct 27, 2019

    The picture: It looks like they found the paint defect(s). [I see two fingers pointed.]

  • Arthur Dailey When I grew tired of the T-Bird trying to kill me by refusing to start at the most inconvenient times/places, I replaced it with a '79 fullsized Dodge (Sportsman) van. Similar to this but with a different grille and rectangular headlights. The 4 'captains' chairs in my van were pretty much identical to the ones in this van. Mine certainly was not as nicely finished inside. And it was a handful to drive in snow/ice. One thing that strikes me about this van is that although a conversion it does not seem to have the requisite dark tint on the windows.
  • Jeff S I am not a fan of Tesla and they were niche vehicles but it seems that they have become more common. I doubt if I get an EV that it would be a Tesla. The electrical grid will have to be expanded because people over the long run are not going to accept the excuse of the grid can't handle people charging their EVs.
  • AMcA The '70 Continentals and Town Cars may have been cousins to the standard body Fords and Mercurys, they didn't have to be disguised, because they had unique, unbelievably huge bodies of their own. Looking at the new 1970 interior, I'd say it was also a cost savings in sewing the seat. Button tufted panels like the 1969 interior had require a lot of sewing and tufting work. The 1970 interior is mostly surface sewing on a single sheet of upholstery instead of laboriously assembled smaller pieces. FINALLY: do I remember correctly that the shag carpet shown under these cars was a Photoshop? They didn't really go so peak '70s as to photograph cars on shag carpets, did they?
  • Inside Looking Out Toyota makes mass market cars. Their statement means that EVs are not mass market yet. But then Tesla managed to make mass market car - Mode; 3. Where I live in CA there are more Tesla Model 3s on streets than Corollas.
  • Ltcmgm78 A lot of dirt must turn before there's an EV in every driveway. There must be a national infrastructure plan written by other than politicians chasing votes. There must be reliable batteries that hopefully aren't sourced from strategic rivals. There must be a way to charge a lot of EVs. Toyota is wisely holding their water. There is a danger in urging unplanned and hasty moves away from ICE vehicles. Do we want to listen to unending speeches every election cycle that we are closer than we have ever been to 100% electrification and that voting for certain folks will make it happen faster? Picture every car in your town suddenly becoming all electric and a third of them need a charge or the driver will be late for work. This will take a lot of time and money.