Tesla has officially unveiled a refreshed version of its popular Model 3 sedan in China, boasting a longer driving range, an upgraded interior, and a more competitive price point. This launch marks the first time the electric vehicle (EV) pioneer has introduced a new model in China before the United States, underlining the company's commitment to the rapidly growing Chinese EV market.
The new Model 3 is being manufactured at Tesla's state-of-the-art Shanghai Gigafactory, which has become a crucial production hub for the company's global operations. The starting price for the refreshed Model 3 in China is 12% higher than its predecessor, reflecting improvements in technology and performance. This upgraded version will also be exported to markets across Asia, Europe, and the Middle East.
In conjunction with the Model 3 refresh, Tesla has implemented price reductions of approximately 14% to 21% for its premium Model S and Model X vehicles in both China and the United States. These price adjustments are seen as a strategic move to maintain profitability while facing stiff competition in the Chinese EV market, where domestic players like BYD have intensified the pricing competition.
The latest iteration of the Model 3 represents Tesla's first major update to its mass-market offering since the launch of the Model Y in 2020. Although the company has not disclosed a release date for the new Model 3 in the U.S., it's clear that Tesla is prioritizing its Chinese customer base for this release.
The new Model 3, set to debut at a trade fair in Beijing on September 2, features several enhancements tailored to Chinese consumers, including a rear display for back-seat passengers, improved acoustic insulation, a more comfortable interior, and additional airbags. Subtle exterior changes have given the sedan a sleeker front end and updated headlights.
One of the standout improvements is the extended driving range. The standard version of the Model 3 now boasts a range of 606 kilometers (377 miles) based on Chinese testing standards, a 9% increase over the previous base model in China.
Tesla has already started accepting orders for the refreshed Model 3 and plans to begin deliveries in China in the fourth quarter of this year. The company is also taking orders in other markets where it exports vehicles from its Shanghai factory, including Germany, Japan, Malaysia, Australia, and New Zealand.
Market experts believe that the new Model 3 will likely find strong demand in markets outside of China, where there is less competition in the EV segment. However, in China, competition has been fierce, with multiple local automakers introducing EVs with similar features and lower price points.
"But in China, we have already seen plenty of new models rolling out since the (Shanghai) auto show in April with similar and even better features and lower prices," Yale Zhang, managing director at Shanghai-based consultancy Automotive Foresight noted.
Although Tesla has not released details about the battery used in the new Model 3, insiders suggest it continues to use a lithium-iron-phosphate battery supplied by CATL for the base model. The extended range is attributed to weight reduction and aerodynamic improvements.
In China, the Model 3 faces competition from domestic EVs like BYD's Seal, Geely's Zeekr 001, Nio's ET5, and Xpeng's P7i, the latter of which recently introduced zero-interest loans and free upgrades to entice buyers.
Tesla has further plans to showcase the updated Model 3 at the Munich auto show, potentially disrupting the plans of German automakers like Volkswagen and Mercedes as they seek to expand their EV offerings in response to China's swiftly evolving EV market.
In terms of pricing, the new Model 3 starts at ¥259,900 ($35,807) in China and €42,990 ($46,670) in Germany. European customers can expect deliveries to commence in late October, further solidifying Tesla's global footprint in the EV market.
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