Tesla debuted a revised Model 3 on Friday that was built in China and has a longer driving range. This is the first time the automaker has introduced a new model in China before the United States.
The new model, which is being produced at Tesla’s plant in Shanghai, has a beginning price that is 12% more expensive in China than the old base model. Additionally, it will be shipped to markets in the Middle East, Asia, and Europe.
In parallel, Tesla reduced the cost of its high-end Model S and Model X in its two most important markets, China and the United States, by roughly 14% to 21%.
The Model 3, Tesla’s second-best-selling model after the Y, could have its base price increased to help safeguard margins. However, the price reductions for its more expensive models highlighted the ongoing pressure that EV manufacturers face, particularly in China where Tesla earlier this year instigated a price battle with Chinese rivals that included industry leader BYD.
Since introducing its current best-selling vehicle, the Model Y, in 2020, Tesla hasn’t made any changes to its mass-market automobile lineup until the introduction of the new Model 3.
A release date for the updated Model 3 in the U.S. market, where Tesla is now providing discounts of over five thousand dollars on some of those vehicles in inventory, was not made public by the automaker. Additionally, the Model 3 is put together in Fremont, California.
China makes its debut
On Saturday, Tesla planned to unveil the most recent Model 3 at a trade show in Beijing. Some of its new features, such as a rear display for passengers in the back seats, appeared to be targeted at Chinese automobile consumers.
In addition, the automobile, according to Tesla, has more airbags, a more comfy interior, and a better acoustic system. Images of the sedan’s exterior revealed minor adjustments that gave it a more streamlined front and new headlamps.
A longer driving range is another promise made by the new Model 3. According to China’s testing requirements, the regular version has a range of 606 km (377 miles). That is a 9% price increase over the Chinese base model it replaces.
Tesla announced that it had begun accepting orders and that delivery to China would start in the fourth quarter. Additionally, it is accepting orders from customers in additional export destinations from Shanghai, such as Germany, Japan, Malaysia, Australia, and New Zealand.
Yale Zhang, managing director at Shanghai-based consulting firm Automotive Foresight, predicted that the updated Model 3 would do well outside of China where there is less EV competition.
But he continued, “Since the (Shanghai) auto show in April, we have already seen lots of new models going out in China with comparable and even better features and lower pricing.
‘Highland’ Project
Tesla was reportedly working on a redesigned Model 3 under the “Highland” project, according to Reuters’ initial report from late November. The project’s participants said that its objectives were to reduce production costs and increase the model’s appeal.
Tesla provided no information regarding the battery in the new Model 3, but a person familiar with the features claimed that it was the exact same lithium-iron-phosphate battery by CATL that was used in the base model.
The speaker said, “The higher range is the result of removing weight and improving the car’s profile so it faces less wind resistance.” Tesla didn’t immediately respond to a question concerning the battery.
The Model 3 faces competition in China from the BYD Seal, Geely’s Zeekr 001, Nio’s ET5, and Xpeng’s P7i. Recently, Xpeng announced no-interest loans and no-cost upgrades for that vehicle.
Tesla announced that it would also display the new model at the car show in Munich, potentially outdoing German automakers like Volkswagen and Mercedes. A number of new EVs are anticipated from them, in part as a response to the rapidly changing market in China.
The latest Model 3 costs 259,900 yuan ($35,807) in China. It starts at 42,990 euros ($46,670) in Germany. Tesla announced that deliveries would start in Europe in late October.