Tesla announced on April 30 that it would reduce the price of the standard range the China-made Model 3 to be able to continue to receive government subsidies.
Tesla said on Weibo: "In order to allow more Chinese consumers to enjoy more cost-effective Tesla products, and to meet the requirements of the state subsidies for new energy vehicles, the price of the standard range upgrade of the Chinese-made Model 3 will be reduced to within 300,000 yuan, the new price will be announced tomorrow (May 1) on the official website (Tesla.cn)."
China last week unveiled its 2020 new energy vehicle subsidy policy, which for the first time stipulates that after the transition period, no subsidy will be available for sales above 300,000 yuan.
The Model 3 from Tesla's Shanghai factory in China starts at 323,800 yuan (about $457,000) before tax breaks or rebates.
Tesla will lower the standard version of the Model 3 to a threshold of less than 300,000 yuan, making it eligible for electric vehicle subsidies in China, Bloomberg reported yesterday, citing sources. This would mean a price cut of 7.3%.
Bloomberg reports that the price cut may have to wait until Tesla starts building Model 3 vehicles in China with batteries from Contemporary Amperex Technology (CATL), China's largest automotive lithium-ion battery maker.
Last November, Tesla entered into a battery pack supply agreement with CATL to use the battery packs produced by CATL for the Model 3 cars produced at Tesla's Shanghai Gigafactory.
Around the same time there were media reports claiming that Tesla was considering a price cut of up to 20 percent for Model 3 vehicles in China, as the car was able to get more parts locally in China.
Tesla Motors performed well in China before the government's consumer incentives for electric vehicles were adjusted and set new sales records during the New Crown outbreak.
Last month, Tesla accounted for as much as 25 percent of electric vehicle sales in the Chinese market.
