Tesla Inc TSLA has introduced and started accepting pre-orders for its locally built electric mid-size SUV Model Y’s standard variant in China for under RMB 300,000 ($46,000), thus qualifying it for state-led subsidies, shows the company’s website.
What Happened: The Elon Musk-led electric automaker’s more affordable variant of the Model Y is expected to begin deliveries in August and can be booked at RMB 276,000 ($42,619) for an estimated 322 miles range, counting subsidies.
Tesla started selling the locally made Model Y in China earlier this year in January after it had started manufacturing the SUV at its Shanghai Gigafactory.
Tesla has been making the mid-size sedan Model 3 in Shanghai since late 2019.
Why It Matters: The Model Y standard variant’s price range narrows the price gap with Tesla’s entry-level Model 3, which comes at a ticket price of RMB 250,900 ($38,728).
“I guess the real question is do consumers favor a MIC Model Y SR at an extra $3.874K vs. the cheapest MIC Model 3, and what this means for Model 3 demand in China?,” GLJ Research analyst and long-term Tesla bear Gordon Johnson said on Twitter.
The Palo Alto-based company sold 33,463 China-made electric cars in May, and its sales in China jumped by 29% from the previous month.
See Also: Tesla To Recall Nearly 300,000 China-Made Vehicles To Update Its Autopilot Software
Only vehicles priced below RMB 300,000 are eligible for the new energy vehicle subsidy in China. The previous Model Yvehicles introduced by Tesla in China are priced at RMB 347,900 and RMB 377,900.
China is key to Tesla’s future growth plans and to fulfilling its ambition to deliver 20 million electric vehicles annually within a decade. The world’s largest automotive market already contributes nearly 30% of Tesla's global sales and is its second-largest market after the United States.
Price Action: Tesla shares closed 2.26% lower at $644.65 on Wednesday.
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Photo: Courtesy of Tesla
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