With the increase of 's adoption of Chinese suppliers and the ramp-up of production capacity, the price of Tesla's China-made models will still have room to go down in the future, Cui Dongshu, secretary general of the China Federation of Vehicle Industry Associations said.

Contemporary Amperex Technology (), China's largest automotive lithium-ion battery maker, recently announced that the company has signed an agreement with Tesla to supply lithium-ion power battery products to Tesla.

However, CATL also reminded that Tesla has no responsibility or obligation to purchase the company's products, and the impact of this agreement on the company's future operating performance is uncertain. Investors are reminded to pay attention to the relevant risks.

It is worth noting that since the A-share market opened the first trading day of the Year of the Rat on February 3, CATL's stock price has been rising all the way. As of the close of February 10, the stock price reached 165 yuan.

Since 2009, Panasonic has been the exclusive power battery supplier for Tesla. However, with the growing demand for Model 3 models in the past two years, Tesla and Panasonic have begun to conflict.

Tesla CEO Elon Musk has said that because of Panasonic's production capacity, Model 3 production has been affected. In April 2019, Panasonic officially announced the suspension of investment in Tesla's Shanghai plant, and the relationship between the two sides quickly cooled.

In January this year, Tesla lowered the price of the Chinese-made Model 3 model from 355,800 yuan to 323,800 yuan, plus a national new energy subsidy of 24,500 yuan. The actual price of the model was about 299,000 yuan, which is the price the first time it dropped to below 300,000 yuan.

In addition, the Model 3 as a pure electric vehicle can also enjoy license discounts in first-tier cities, such as the Shanghai license plate transaction price exceeded 90,000 yuan, Shenzhen has also exceeded 60,000 yuan.

Cui Dongshu believes that "with the increase of Tesla's manufacturing rate in China and the ramp-up of production capacity, there is still a lot of room for the price of Tesla's Chinese-made models in the future.

He predicts that the price of Chinese-made Model 3 models will drop to 250,000 yuan in the second half of this year, a drop of nearly 20%.

Tesla's Shanghai plant manufacturing director Song Gang once revealed that the current localization rate of parts for Tesla's Shanghai super factory is about 30%, and it is planned to increase to 70% -80% by July 2020. The Model 3 made in China will be realized by the end of the year. All parts are made in China.

In fact, China's manufacturing will not only make Chinese-made models meet the price reduction window again, but also help Tesla reduce costs.

Relevant financial report data show that in the fourth quarter of 2019, Tesla's comprehensive gross profit margin was 18.8%, a decrease of 0.1% from the previous month; gross vehicle sales gross profit rate was 21.6%, a decrease of 0.2% from the previous month.

At the same time, the revenue cost of Tesla's auto sales business reached 4.815 billion US dollars, an increase of 19.95% month-on-month. After Model 3 is fully realized in China, raw material expenses can be saved by 10% -20%, manufacturing costs can be reduced by 50%, and labor costs can be reduced by 75%.

According to this calculation, the total production cost can be reduced by 20% -28%. This means that the gross profit margin of China-made Model 3 models will reach 35%.