Tesla Changes China's EV Market With Overwhelming Sales After Model 3 Price Reduction

China is a huge market for the automotive sector, especially in the field of electric mobility. The country reported nearly 50 percent of worldwide electric vehicle sales, according to 2019 estimates, making it one of the hottest regions to be targeted by all-electric vehicle manufacturers.
For Tesla, because of a number of local manufacturing firms, they have not been able to crack the case of selling their cars in the region. As the prices of the Model S and Model X were on the higher side, these local businesses undermined Tesla’s revenues early on.
The local brands offered a much lower cost for their cars in comparison. However, the launch of the Model 3 changed the scene a bit, as it offered consumers a Tesla car at a much lower rate, even if their sales did not ramp up entirely.
Tesla sold 40,000 of the 1.1 million electric vehicles sold in China in 2019, which is less than 4 percent.
The previous cost of the Model 3 Standard Range Plus was 271,550 Yuan (US$ 40,000), but it will cost 249,900 Yuan (US$ 36,800) after the price cuts.
That’s a price drop of $3,200, which is the key explanation for the sales increase. This also implies that the Model 3 Standard Range Plus produced in China is less costly than one produced in California at the Fremont factory, which costs approximately $37,990.
As Tesla has also reported an expansion in the range from 276 miles (444 km) to 290 miles (466 km), new customers in China can now not only get cheaper vehicles, but also better-performing cars.
The price of the Long Range version has also been decreased from 344,050 Yuan ($50,660) to 309,900 Yuan ($45,600) in addition to this. These are major price cuts brought on by Tesla and are likely to have a positive impact on revenue.
There have been rumors that Tesla is expected to roll the Model 3 cars within the battery pack in China fitted with new cell chemistry. The Model 3 Standard Range Plus version will now run on batteries containing lithium iron phosphate (LFP), which will be fully cobalt-free.
That is certainly a low figure given the contribution of China to the EV market. Tesla will look to raise the number with the latest pricing now rising revenue.

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