It has been noted more than once that Tesla’s pricing policy in the US and China markets is multidirectional. In both countries, the company has production of electric vehicles, but if in the USA they have been steadily becoming more expensive since the beginning of the year, in China they periodically lose in price. Tesla Model 3 Chinese assembly recently became cheaper immediately by $2323.
As Electrek explains, the base version of the Tesla Model 3 in China now costs $ 36,500 at current exchange rates. A similar electric car of American assembly in its homeland is already estimated at $39,990. Unlike the US market, where Tesla does not consider it necessary to conduct targeted work with the press, in China the company has a specialized service, and she explained that the price reduction was due to a decrease production costs.
Apparently, the shortage of components did not prevent Tesla from optimizing the cost of electric vehicles assembled in China. The locally assembled Model 3 range has recently dropped mid-range, and this may be a direct consequence of the difficulty in obtaining individual components. We add that the basic versions of Tesla electric vehicles in China are equipped with traction batteries based on iron phosphate, which are cheaper to manufacture, but have limited capacity.
Since traction batteries form a significant part of the cost of any electric vehicle, they are the ones with the maximum potential for price reduction. Chinese Tesla electric vehicles are equipped with locally produced CATL and LG Energy Solution batteries. Tesla has many competitors in the Chinese market, so it is forced to flexibly build its pricing policy. The Chinese site, in the face of high demand in the US market, has also become the main exporter of Tesla electric vehicles to other countries.