According to the company’s website, Tesla Inc (NASDAQ: TSLA) has unveiled and begun accepting pre-orders for its domestically made electric mid-size SUV Model Y’s base model in China for less than RMB 300,000 ($46,000), thereby qualifying it for state-led subsidies.
What happened was this: The Elon Musk-led electric automaker’s more economical Model Y is set to begin delivery in August and can be pre-ordered for RMB 276,000 ($42,619), which includes subsidies, with a range of 322 miles.
Tesla began selling the domestically built Model Y in China in January of this year, when the company began producing the SUV at its Shanghai Gigafactory.
See also: Elon Musk Applauds China’s ‘Economic Prosperity,’ Urges ‘People To Visit And See For Themselves’
Since late 2019, Tesla has been producing the Model 3 mid-size automobile in Shanghai.
Why It Matters: The pricing range of the Model Y base variation closes the price gap with Tesla’s entry-level Model 3, which costs RMB 250,900 ($38,728).
“I guess the real question is whether people prefer a $3.874K MIC Model Y SR over the cheapest MIC Model 3, and what this indicates for Model 3 demand in China?” tweeted GLJ Research analyst and long-time Tesla bear Gordon Johnson.
In May, the Palo Alto-based business sold 33,463 Chinese-made electric automobiles, a 29 percent increase over the previous month.
Also read: Tesla To Recall Nearly 300,000 China-Made Vehicles In Order To Update Autopilot Software
In China, only automobiles costing less than RMB 300,000 are eligible for the new energy vehicle subsidies. Tesla’s earlier Model Y automobiles in China were priced at RMB 347,900 and RMB 377,900, respectively.
China is critical to Tesla’s future expansion ambitions and its goal of delivering 20 million electric vehicles per year within a decade. The world’s largest automobile market already accounts for roughly 30% of Tesla’s global sales and is the company’s second-largest market after the US.
Tesla shares ended the day 2.26 percent lower at $644.65 on Wednesday.
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