During Tesla’s Q1 2020 earnings call on Wednesday, CEO Elon Musk announced that China would be cutting the price of the Standard Range Plus (SR+) Model 3 in order to once again qualify for electric vehicle (EV) subsidies in the country.
Now Tesla China has officially announced the new price on their Weibo account (Chinese version of Twitter), in a move that will hopefully keep sales going at a record pace.
The new price after the EV subsidy is ¥271,550 ($53,800 CAD), putting the sticker price at ¥291,800 ($57,800).
According to Tesla chief financial officer Zachary Kirkhorn, the cost to produce the made-in-China Model 3 is already lower than the cost to produce at Fremont. As the manufacturing process at Giga Shanghai matures, and as more supply lines become locally sourced in China, the margin on the Model 3 increases, giving Tesla the flexibility to lower the price to meet the rules for the subsidy.
According to Google Translate, this is what the Weibo message says:
“From now on, the base price of the upgraded version of the Model 3 standard battery life in China will be adjusted to RMB 291800. Based on this base price, the subsidized price will be RMB 271550. We hope that through this price adjustment, more Chinese consumers can enjoy more cost-effective #Tesla products. At the same time, we will also adhere to the direct sales and service system to provide excellent service to car owners.”