Tesla, a major player in the electric vehicle industry, has reduced prices for its Giga Shanghai-built Model 3 and Model Y to strengthen its position in China’s fiercely competitive electric vehicle market. The company is adjusting its prices in China for the first time in 2024 to increase the affordability and appeal of its cutting-edge electric vehicles. This marks Tesla China first set of price adjustments in 2024, focusing on enhancing the affordability and appeal of its cutting-edge electric vehicles in a market where demand has witnessed a recent decline.
Price Adjustments Overview
Tesla China has reduced the prices for various versions of the upgraded Model 3 and Model Y. Notably, the Model 3 Rear Wheel Drive (RWD) and Model 3 Long Range Dual Motor Wheel Drive (AWD) now cost 3.87% and 5.93% less, respectively. Similarly, the Model Y RWD and Model Y Long Range Dual Motor AWD received reductions of 2.12% and 2.82%, respectively. The Model Y Performance, however, maintains its original price.
Before the recent adjustments, the base Model 3 RWD started at RMB 261,400 ($36,700), but now it begins at RMB 245,900 ($34,500). Likewise, the Model 3 Long Range Dual Motor AWD saw a decrease from RMB 297,400 ($41,870) to RMB 285,900 ($40,170). The Model Y RWD and Model Y Long Range Dual Motor AWD also experienced price drops, making them more affordable for potential buyers.
Consumer Appeal
Tesla China hopes to increase consumer interest in the Model 3 and Model Y by lowering prices. While still considered premium cars, these vehicles’ cutting-edge technology, high performance, and safety features make them appealing. Lower prices may entice more customers to see the Model 3 and Model Y as excellent value for money.
Tesla’s First Price Adjustments in China for 2024
In 2024, Tesla made its first round of price adjustments in China, focusing on the upgraded Model 3 and slightly refreshed Model Y. This marks the first price cut since August of the previous year.
Tesla China: Model 3 Price Reductions
The Model 3 RWD sees the most significant reduction, dropping by ¥15,500 (C$2,900/US$2,200) to ¥245,900. The Model 3 LR also gets a ¥11,500 (C$2,161/US$1,620) cut, now starting at ¥285,900. These reductions represent approximately 6% and 4% decreases, respectively.
Tesla China: Model Y Adjustments
In the Model Y lineup, the RWD version experiences a 3% reduction, down ¥7,500 (C$1,400/US$1,050) to ¥258,900. The LR variant now starts at ¥299,900, a ¥6,500 (C$1,220/US$915) or 2% reduction. However, the Model Y Performance maintains its original price of ¥363,900.
This price adjustment comes when Tesla and other automakers in China are grappling with decreased demand. It is part of Tesla’s strategy to stimulate demand, following measures like an extended insurance subsidy promotion and introducing new financing offers with low-interest rates in early January.
