Tesla MIC Model 3 Expected To Be Over 20% More Affordable In 2020

Electric vehicle maker Tesla is reportedly planning to develop Tesla Made In China (MIC) Model 3 vehicles more than 20 percent less expensive in China, says a new report. The latest drone videos on the Tesla Gigafactory 3 reveal that Tesla is steadily producing and shipping MIC Model 3 vehicles out of the Shanghai facility. So far, the Gifactory 3 has shown impressive progress considering that the groundbreaking at the location happened less than a year.

At present, we do not have any idea how much of the Tesla MIC Model 3 is actually made in the country. When the electric vehicle maker began taking pre-orders for the car model, the Model 3 Standard Range Plus with autopilot is priced at around $50,000. Based on the price and structure of Model 3, the price of the vehicle imported in China from the factory in the US is relatively lower.

A new report from Bloomberg reveals that Tesla is finding ways to minimize costs by over 20 percent. The company is reportedly considering sourcing components locally to avoid tariffs. Additionally, Tesla targets to bring down the cost by utilizing more local components, reducing imported components, the reports claims.

The retail price of Tesla MIC Model 3, which is currently at around $50,800, will be reportedly lowered in the second half of 2020. Lowering the price of the electric vehicle in Shanghai factory could help Tesla better rival its local competitors like Xpeng and Nio, says Elektrek. No one initially believed that Tesla would be able to build the entire Gigafactory 3 from the ground up and begin producing vehicles in less than a year.

In October, the American electric vehicle maker said that they are doing general assembly, body, and paint at Tesla Gigafactory 3. But, it seems that the company sees the potential of reducing costs by over 20 percent through local sourcing and production to avoid tariffs. It is clear that at this point, a considerable number of components of the Tesla MIC Model 3 are still being sourced outside China, which includes battery cells and packs.

There are whispers online that Tesla is collaborating with LG Chem and CATL for its local battery cells need. These suppliers are reportedly providing for the battery cells that will be used by Tesla MIC Model 3 and Tesla Model Y. However, it sounds like the partnership is going to happen in the near future, not at present.