SHANGHAI, Sept 1 (Reuters) – Tesla Inc (TSLA.O) on Friday unveiled a redesigned, made-in-China Model 3 with a longer driving range, the first time the automaker has launched a new model in China before the United States. .
The new model, which is being built at Tesla’s factory in Shanghai, has a starting price 12 percent higher than the previous base model in China. It will also be exported to other markets in Asia, Europe and the Middle East.
At the same time, Tesla cut prices of its premium Model S and Model
Raising the base price on the Model 3, Tesla’s best-selling Model after the Y, could help protect margins. But the price cuts for its high-end models have highlighted the ongoing pressure electric vehicle makers are facing, especially in China where Tesla sparked a price war with Chinese rivals including industry leader BYD (002594.SZ) earlier this year.
The new Model 3 is Tesla’s first change to its mass-market lineup since it launched the global best-selling Model Y in 2020.
Tesla has not announced when the new Model 3 will be launched in the US market, as it is currently offering discounts of more than $5,000 on some of those vehicles in stock. The Model 3 is also assembled in Fremont, California.
First appearance in China
Tesla plans to debut its latest Model 3 at a trade show in Beijing on Saturday, and some of its new features, including a rear screen for rear-seat passengers, appear to be aimed at Chinese car buyers.
Tesla said the car also has a better audio system, a more comfortable interior and additional airbags. Images of the exterior design showed small changes that gave the sedan a sleeker fascia and new headlights.
The new Model 3 also promises a longer driving range. The standard version has a range of 606 kilometers (377 miles) based on Chinese test standards. That’s about 9% higher than the base model it replaces in China.
Tesla said it has begun taking orders and will begin deliveries in China in the fourth quarter. It is also taking orders in other markets where it exports from Shanghai, including Germany, Japan, Malaysia, Australia and New Zealand.
The new Model 3 should sell well outside China where competition in electric vehicles is less, said Yale Zhang, managing director of Shanghai-based consultancy Automotive Foresight.
He added, “But in China, we have already seen the launch of a lot of new models since the Shanghai Auto Show in April with similar and better features and lower prices.”
Reuters first reported last November that Tesla was developing a facelifted Model 3 in a project codenamed “Highland.” People involved in the project said it aims to reduce production costs and enhance the model’s appeal.
Tesla didn’t provide any details about the new Model 3’s battery, but a person familiar with the features said it’s the same CATL (300750.SZ) lithium-iron-phosphate battery as the base model.
The person added that the higher range is the result of reducing weight and improving the look of the car so it encounters less wind resistance. There was no immediate comment from Tesla regarding the battery.
In China, the Model 3 competes with BYD’s Seal, Geely’s Zeekr 001 (0175.HK), Nio’s (9866.HK) ET5 and Xpeng’s (9868.HK) P7i. Xpeng just announced interest free loans and free upgrades for that vehicle.
Tesla said it will also show the new model at the Munich Motor Show, which could steal the limelight from German automakers such as Volkswagen (VOWG_p.DE) and Mercedes (MBGn.DE). They are expected to announce a slew of new electric cars, partly in response to the rapidly shifting Chinese market.
In China, the price of the new Model 3 starts at 259,900 yuan ($35,807). In Germany, the price starts at 42,990 euros ($46,670). Tesla said it will begin deliveries in Europe in late October.
($1 = 7.2582 Chinese yuan, $1 = 0.9211 euros)
(Reporting by Zhang Yan in Beijing, Hyunju Jin in San Francisco, Daniel Lusink in Tokyo and Brenda Goh in Shanghai; Editing by Meral Fahmy and Edwina Gibbs
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