Market Overview

Tesla Wants To Manufacture Model 3 With A Longer Range in China

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Tesla Wants To Manufacture Model 3 With A Longer Range in China

Tesla Inc. (NASDAQ: TSLA) has sought regulatory approval in China to manufacture a heavier Model 3 with a longer range.

What Happened

Tesla, which started delivering cars in China in December 2019, wants to manufacture a heavier Model 3, according to Reuters. The production of Model 3 had begun in October last year. The updated model is supposed to have a longer driving range than the current Model 3, which has a range of more than 400 kilometers. The new vehicle would be a rear-wheel drive. 

The electric car maker restarted production at its Shanghai gigafactory on Monday after an extended shutdown due to the Covid-19 epidemic in China. 

Why It Matters

Tesla’s Chinese factory manufactures vehicles designed specifically for the local market and priced slightly lower than imported models. In January, Tesla had announced the opening of a new design center in China and had started recruitment of talent to make “Chinese style” cars.

China’s large electric car market is crashing. BAIC, a state-controlled company and number one seller of BEVs in China, posted a 54.5% year-on-year fall in January sales. According to the Chinese automakers association, the Covid-19 epidemic might cause sales to fall 50% year-on-year in February. 

It is unlikely in this scenario that Tesla can hope to sell half a million cars in China in 2020, which is the world’s largest electric vehicle market.

Price Action

Tesla shares traded 1.99% lower at $752 in the after-hours session on Wednesday. The shares had closed the regular session 0.92% lower at $767.29.

Photo Credit: Courtesy of Tesla.com

 

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