Tesla cuts prices for certain Model 3 cars by up to 7.6 percent, making them available for as low as $72,000.
This was the third time since November that the California-based electric car maker has slashed its prices for cars being sold in China, Reuters noted. Tesla has initially cut prices of its Model X and Model S cars by 12 to 26 percent in November. The company said it will handle a significant part of the tariffs to make the models more affordable for the Chinese market which is the largest in the world with regard to electric cars.
The second price adjustments took place early in December, also with Model S and Model X, after China announced it would remove tariffs on car imports from the United States for three months starting in January. For this price cut, buyers are expecting to purchase Model 3 units at $6,000 less than the intended prices.
Tesla's sales in China decline by as much as 70 percent in October as the company feels the impact of the China-US trade war. The electric car maker was only able to sell 211 cars in October as the global trade tensions made prices highly unaffordable.
At the time, market observers said that Tesla could reduce prices if it starts to produce cars inside China. Operational costs, most especially shipping, when importing from the U.S. make prices 55 to 60 percent higher.
High operational cost could be the reason why Tesla is accelerating construction of its Gigafactory 3 in Shanghai and is targeting an opening by the second half of 2019.
Late in November, Shanghai mayor Ying Yong and Vice Mayor Wu Qing both shared a local article announcing that land leveling has completed for the Tesla Gigafactory 3 in Shanghai.
Tesla officially acquired an 864,885-square meter plot in the region. The company has also started hiring for staff for the Gigafactory 3 which is the first Tesla facility to be located outside of U.S.
Tesla is doubling its efforts in China as it seemingly positioned itself strategically in the European market. It will soon sell Model 3 in Germany, Switzerland, and Norway in February, according to reports. The Model 3 version will reportedly be priced at $72,000.
Model 3 is expected to be the biggest selling electric car in Europe and Germany in 2019, according to Ferdinand Dudenhoeffer from the Center for Automotive Research at the University of Duisburg-Essen. Europeans are expected to buy as many as 100,000 Model 3s in 2019, according to Dudenhoeffer.
