Tesla starts sales of the cheapest model 3 car variant in China

BEIJING / SHANGHAI: US electric vehicle manufacturer Tesla Inc. announced that it would start taking orders Friday in China for a cheaper version of its model 3 car, with the aim of boosting sales in China affected by trade tensions between Washington and Beijing.

The California company said in a statement that Chinese customers would be allowed to place orders for a variant of the long-range rear-wheel drive model 3, whose starting price will be 433,000 yuan ($ 64,300.56).

Previously, the starting price of a model 3 in China was 499,000 yuan, for a long-range full-wheel drive version. Tesla announced earlier this year that it was planning to start delivering model 3 cars to Chinese customers in March.

Tesla is currently importing all cars sold in China, but is building a factory in Shanghai that will manufacture Model 3 cars in the initial phase.

The company said in October that its sales in China had been reduced to nil after Beijing raised tariffs on imports of US cars to 40% in July. Since then, China has temporarily suspended the additional customs duty of 25%, reducing it to 15%.

Tesla has adjusted prices for its US-made cars in China to keep its cars affordable in the country. This decision also aimed to compete with a large number of young electric vehicle companies such as Nio Inc, Byton and XPeng Motors.

Tesla has announced plans to start production at its Shanghai plant in the second half of this year and plans to build 3,000 model 3 vehicles a week.

(1 USD = 6.7340 Chinese yuan)

(Report by Yilei Sun in Beijing and Brenda Goh in Shanghai, edited by Christopher Cushing and Muralikumar Anantharaman)