The China-made Tesla Model 3 started a new round of price changes on October 1, with information on the Tesla China website now showing that the price of the lowest-priced standard range-extended upgrade has been reduced to RMB 249,900 ($36,800), a drop of RMB 21,650.
The China-made Tesla Model 3 long-range rear-wheel drive version is also priced down to RMB 309,900, a reduction of RMB 34,150.
On the Tesla China website, the China-made Tesla Model 3 price adjustments are as follows:
1. The standard range-extended upgraded model, which is priced at RMB 249,900, down from RMB 271,550.
2. The long-range rear-wheel-drive version, which may be priced at RMB 309,900, down from RMB 340,550.
3. The Performance version price remains unchanged at RMB 419,800.
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The standard range-extended upgraded model has a top speed of 225 km/h and a 0-100 km/h time of just 5.6 seconds.
It is covered by the same warranty for the entire car and battery, which is 4 years or 80,000km for the car, and 8 years or 160,000km for the battery.
Tesla's last price increase in China was on May 1 this year. At that time, the pre-subsidy price of the Chinese-made Model 3 standard range upgrade was reduced from RMB 323,800 to RMB 291,800. The final purchase price of the Chinese-made Model 3 standard range upgrade was reduced to 271,550 yuan after owners received 20,250 yuan in new energy vehicle subsidies.
Previous media report said Tesla will begin selling Model 3 cars built in Shanghai and equipped with LFP batteries to Chinese customers on Thursday.
The reports had suggested that the price of the Model 3 could drop soon, as lithium iron phosphate batteries do not contain nickel and cobalt, the two most expensive components of traditional NMC or Ni-Mn-Co batteries.
Tesla's latest price adjustment bears out those reports.
So far, most Model 3s built in the US and China have used NMC batteries.
Prior to the latest price adjustment, the Model 3 cost around $39,900 in China, after all government subsidies.
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Previously, Reuters cited sources who said that Tesla will use the LFP battery on all standard series Model 3 models built in China.
One of the sources said that a Chinese-made Model 3 EV with the new, cheaper battery would cost 249,900 yuan ($36,800) after government subsidies, which would lower the starting price of the base Tesla model by nearly 10 percent. Tesla's cheapest Model 3 model currently sells for RMB 271,550 after subsidies.
The sources say that the LFP battery is supplied to Tesla by CATL, which has announced several new improvements to its lithium iron phosphate battery this year and is known to have close ties to Tesla.
In June this year, CATL announced that it was ready to start producing cobalt-free batteries that would be around 10% cheaper than traditional NMC batteries and have a lifespan of up to 2 million kilometers.
CATL CEO Zeng Yuqun said : "If someone places an order, we are ready to produce it." Zeng said the cost of the LFP battery is expected to be about 10 percent less than that of the NMC battery.
In August, CATL announced to the world that it was working on a battery that would be free of cobalt and nickel. Shortly after that, Elon Musk started talking about how his company would soon have a million mile-long battery.
The next question is whether the LFP battery will appear on Tesla products sold in other countries.
While they don't have the same energy density as NMC batteries, if the price advantage is significant, buyers may be more interested in a lower price rather than a few more miles of driving.
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