TransportationReuters/Aly Song A Tesla logo is seen at a groundbreaking ceremony of Tesla Shanghai Gigafactory in Shanghai, China.
- Tesla on Friday announced that the Model 3 will start at about $47,529 in China.
- That's about 13% cheaper than Chinese consumers were previously paying.
- More expensive versions of the sedan will run as high as $75,549.
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Tesla on Friday announced that its Model 3 made in China at its second Gigafactory, currently under construction in Shanghai, will cost about 13% less than the sedans its currently importing for sale in the world's largest car market.
The standard range plus version of the Model 3 will cost 328,000 yuan, or approximately $47,529. That's 49,000 ($7,000) less expensive than consumers are paying now. More expensive trims will cost up to 522,000 yuan ($75,549) for the performance version.
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China is key to Tesla's long-term strategy, especially given concerns from some Wall Street analysts that demand in markets outside the country, like the United States, may be waning. CEO Elon Musk noted after the company's first quarter that cars will be cheaper to produce in China.
"Learning from our experience, we can now build a second-generation Model 3 line in China that we expect will be at least 50% cheaper per unit of capacity than our Model 3-related lines in Fremont and at Gigafactory 1," he wrote in a quarterly update letter. "Our Model Y manufacturing capacity will have the same simplicity as the line planned for Gigafactory Shanghai."
Adam Jonas, an analyst at Morgan Stanley, said recently that a lower-priced model in China will be key to continued growth.
"Our China Auto team is extremely constructive on the outlook for Tesla to gain share with a domestically sourced Model 3 and Model Y," he said in a note to clients this week. "We believe the 2019 air-pocket in Model 3 demand may largely continue until an affordable, locally produced Model 3 is available in that market."
Jonas also noted that he doesn't expect Tesla do begin delivering cars to Chinese consumers from its new Shanghai factory until 2020, later than the company's forecasts.
Tesla also announced Friday that right-hand drive versions of the Model 3 are now available for pre-order in countries including Australia, Hong Kong, and more.
Shares of Tesla, already down more than 50% from their most recent highs, slid about 1.6% in early trading Friday. The stock is pointing to an open near $185 on Friday.
More Tesla news:
- One of Tesla's most optimistic backers explains why it's doubling down as other investors rush for the exits
- Elon Musk tells Tesla employees in leaked email that the company needs to catch up on car deliveries before the end of the quarter
- Tesla just got slammed with a new lawsuit from a supplier that alleges the automaker hasn't paid a $1.7 million bill
Get the latest Tesla stock price here.