Credit：Tesla China

Tesla has lowered prices on all the variants of new model 3 and two versions of Model Y on Friday, according to Tesla China’s website.  The Model 3 Rear-Wheel Drive (RWD) now costs RMB245,900 (US$34,620), representing a reduction of RMB15,000, or around 6%. Price of the Model 3 Dual Motor All-Wheel Drive version (AWD) dropped RMB11,500 to RMB285,900. Model Y RWD version was cut by RMB7,500 to RMB258,900, and the long range version was reduced by RMB6,500 to RMB299,000. In the meantime, Tesla China discontinued the insurance subsidy it offered for Model 3 and no longer offered the auto loan with the low rate of 1.99%.

The adjustment is Tesla’s first direct price cut for newly launched Model 3. it unveiled the popular model in last September. That is the first major upgrade since the midsize electric vehicle (EV) was first revealed in 2016, and is also Tesla’s first change to its mass-market car line-up since it rolled out Model Y, another best-seller, in 2020. The most unexpected of launch is that Tesla raised the starting price for the entry offering. The RWD version was priced at RMB259,900, 12% higher than price of the older version, while the AWD version now costs RMB395,900, RMB36,000, or 10.8% cheaper than the older. The new Model 3 was just available in its largest market, the United States, earlier this week. The new Model 3 costs the same as the old one in North America. The Model 3 RWD costs US$38,990 and AWD remains priced at US$45,990.

The price cuts seem as a rerun of Tesla’s move a year ago.  The U.S. electric vehicle behemoth lowered price by up to 13% in China on January 6 2023, making the starting price of Model Y and Model 3 down to new low, about 43% and 30% cheaper than those on sale in U.S. that time. Tesla China surprisingly raised prices twice in four days in May after CEO Elon Musk signaled more cuts to come at the earnings call in April. But Musk suggested in July that his company still could further cut prices despite the earnings in the second quarter severely dented by major price cuts.

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