Tesla is considering cutting prices of some of its cars in China for a second time this year so they will continue to qualify for government rebates on electric vehicles that are being tightened, Bloomberg reported on Wednesday citing people familiar with the matter.
The cut would bring prices of the standard version of the China-made Model 3 below the 300,000 yuan maximum threshold for electric cars in China to qualify for subsidies, the people said.
The Model 3 made at China's Shanghai factory starts at 323,800 yuan ($45,700) before tax breaks or rebates. But as new rules that said no subsidy is available for cars above 300,000 yuan kicked in, the Model 3 would soon lose such a benefit if there is no price cuts.
A price drop of the Model 3 below 300,000 would mean a reduction of more than 7.3%. The plan has been submitted to the Chinese government as carmakers typically provide advance notice on such matters to authorities, though it's up to Tesla whether it will go ahead with it, one of the people said.
No final decision has been made, including the timing of Tesla's price cut, but it could coincide with the company's introduction of Model 3s equipped with cheaper batteries from local supplier Contemporary Amperex Technology Co. Ltd., one of the people said.
In response to this, an unnamed Tesla representative told thepaper.cn that the above report "is not official information".
It's worth noting that the day after the new subsidy rule was released, Tesla's official website showed that the final purchase price of the Chinese-made Model 3 standard range upgrade rose 4,500 yuan from 299,050 yuan to 303,550 yuan.
The final purchase price of the Chinese-made Model 3 Long Range Edition rose 5,000 yuan from 339,050 yuan to 344,050 million yuan.
However, analysts said that Tesla will reduce its price before July 22 to continue to enjoy subsidies.
CITIC Securities said the new energy vehicle subsidy policy is in line with expectations and is expected to pull China's manufacturing Tesla to cut prices and volume.
Xpeng Motors founder He Xiaopeng also said there is a probability that within a year the China-made model3 long-range version of the subsidized price will be reduced to 277,500 yuan, down 61,500 yuan from the current price of 339,000 yuan.
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