Tesla Cuts Price of China-Built Model 3

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Tesla broke ground on its factory in Shanghai, China in early 2019 and started producing vehicles in October. Those vehicles were a little cheaper than the ones made in the U.S. thanks to government subsidies, but now they’re a lot cheaper. Tesla just cut the price by 16 percent.

That brings the cost of a new Tesla Model 3 built in China down to about $42,919 for Chinese customers according to Reuters. That discount comes partly from avoiding import tariffs, but also from subsidies offered by the Chinese government.

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The first deliveries of China-built Model 3s went to employees at its Shanghai plant just before the start of the new year. Now, deliveries are expected to begin for customers outside the company.

Before anyone received orders, vehicles were shipped throughout China so potential customers could take test drives. The first orders were taken on October 25.

In addition to making the first deliveries of its China-built Model 3, Tesla plans to double the number of service centers and fast charging stations in the country. It already has some as Tesla isn’t new to China.

It’s been selling vehicles in the country for several years. The difference now is that it’s making those vehicles in China. Tesla says that 30 percent of its supply chain is local right now, but plans to completely localize it by the end of the year.

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The Shanghai factory is currently hitting its production target of 1,000 units per week or 280 cars per day. Continuing to hit its production goals is key to Tesla’s strategy.

While this is the company’s first plant outside the United States, it won’t be the last. Tesla also has plans to build a factory in Germany giving it easier access to the European marketplace.