Tesla Inc (NASDAQ: TSLA) has cut prices of its domestically-made Model 3 vehicles in China.
What Happened: The Elon Musk-led electric vehicle maker’s Chinese website shows that the starting price of its Shanghai-made standard range Model 3 sedan has been reduced 8% to RMB 249,900 ($36,800) on a post-subsidy basis. The earlier price for Model 3 was RMB 271,550 ($39,990) after subsidies.
The price for local longer-range Model 3 electric car has also been slashed 11% from RMB 344,050 ($50,667) to RMB 309,900 ($45,638).
The standard range Model 3 sedans would now come with cheaper lithium iron phosphate (LFP) batteries rather than the nickel-cobalt-manganese (NMC) ones, people familiar with the matter told Reuters, which first reported the news.
Why It Matters: This is the third time the Palo Alto-based company has cut the price of its Model 3 range this year in China. Prices were also cut in January and April.
Chinese rivals of Tesla are increasingly becoming price competitive and are attracting consumer and investor attention.
Warren Buffett-backed BYD Auto Co. Ltd, subsidiary of BYD Company Limited (OTC: BYDDF) received 40,000 orders for its recently launched “Han” range of electric cars, which are priced between $33,000 to $40,000, CNBC reported.
Xpeng Inc’s (NASDAQ: XPEV) Vice Chairman Brian Gu said his company can compete with Tesla’s planned lower-cost electric vehicle with mid-range EVs priced near the $25,000 mark.
Li Auto Inc (NASDAQ: LI) prices its vehicles between $21,000 and $70,000 and raised $1.1 billion at an initial public offering in August.
Price Action: Tesla shares traded nearly 1.6% higher at $435.80 in the pre-market session on Thursday.
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