On May 1, Tesla Made in China Model 3 standard battery upgrade price reduction, subsidy from the starting price from 3238 million yuan to 2918 million yuan, new energy passenger car subsidy after the final consumer price from 303.55 million yuan to 271.55 million yuan. As for the reasons for the price cut, Tesla’s vice president of external affairs, Tao Lin, told Newsbeat that Tesla hopes that the domestic Model 3 standard battery life upgrade will comply with China’s new energy vehicle subsidy policy. The price reduction was intended to allow consumers to enjoy new energy passenger car subsidies, not to capture a larger market share.
Tesla’s Shanghai Super plant, located in the new area of the Shanghai Free Trade Area, is currently the only one in the world that is producing Tesla vehicles. Mr Tao said the Shanghai plant was producing at normal speeds, with a capacity of 3,000 vehicles a week. The second phase of Tesla’s Shanghai plant, which is mainly used to produce Model Y, is under construction and is expected to go on sale next year.
Subsidy after the purchase price of 270,000 yuan, the original intention is “hope that consumers enjoy the subsidy”
Tesla didn’t give up the market for less than $300,000.
The Ministry of Finance and other four departments issued on April 23 “on the improvement of new energy vehicles to promote the application of financial subsidies policy notice” (hereinafter referred to as “Notice”),” mentioned that the new energy vehicle promotion and application of the financial subsidy policy implementation period extended to the end of 2022.
The most obvious change in the new policy of new energy vehicle subsidy in 2020 is the setting of a “price line” of 300,000 yuan, that is, the price of new energy passenger cars before the sale price must be 300,000 yuan and below, the price of more than 300,000 yuan of new energy passenger cars can not enjoy subsidies.
Due to the previous domestic Model 3 standard battery renewal upgrade subsidy before the sale price of 3238 million yuan, higher than the threshold of 300,000 yuan. If the selling price is not adjusted, the model will lose its subsidy after the end of the transition period on July 22.
In response to the price cut, Dowlin said Tesla’s original intention was to hope that consumers would enjoy the state’s support for new energy vehicles, helping consumers to “buy more cost-effective products at a more reasonable price” and “thus enjoying intelligent products more quickly, not on the basis of a larger market share.” “
And the reason for the price reduction is only for the domestic Model 3 standard battery upgrade, because the original price of the model is close to 300,000 yuan, the domestic Model 3 long-range version of the official website price of 344.05 million yuan, high-performance version of 4198 million yuan. Tao Lin believes that the domestic Model 3 standard battery extension price adjustment to meet national policy price limit is a “feasible solution.”
“Tesla’s pricing strategy is simple, determining reasonable profit margins, on which any savings, such as tariff adjustments, subsidies, cost optimization, etc., will be fed back to consumers.” “
Tao Lin explained that the current change in Tesla car prices in the market response is very clear, because it is a direct system, terminal price transparency, no staff discount, “everyone is the same price, corresponding, we have any price adjustment, everyone will know in the first place.” “
After the “Notice” was issued, there are voices that the domestic Tesla will be reduced to 300,000 yuan to meet the 2020 new energy vehicle subsidy new policy conditions. Citic Securities issued a research report that the new energy vehicle subsidy policy is in line with expectations, is expected to pull domestic Tesla to reduce the price.
However, the domestic Model 3 standard battery life upgrade version of the final hand price experience first rise and then fall. The day after the announcement, Tesla’s official website showed that the final purchase price of the domestic Model 3 standard battery-renewed version rose from 299.05 million yuan to 30,355 million yuan, up 4,500 yuan. The final purchase price of the domestic Model 3 long-life version rose from 339.05 million yuan to 344.05 million yuan, up 5000 yuan.
But Tesla, for its part, believes that the final increase in consumer prices is due to a reduction in the amount of subsidies under the latest subsidy policy. Tao Lin said that the domestic Model 3 standard battery extension version of the basic price has been 3238 million yuan, the final price is the base price and new energy passenger car subsidy after the price.
From the time the subsidy policy was issued until this price reduction, the subsidy for the standard renewal upgrade during the transition period was 80% in the past, and the official website appears to have raised prices “entirely because of price changes brought about by changes in subsidy policies”.
Notably, on the road to the localization of Tesla’s parts, the domestic power battery leader, Ningde Times, announced that it would provide lithium-ion powered batteries to Tesla from July, with a delivery agreement that will last until June 30, 2022. If that is achieved, the lithium phosphate (LFP) battery will be incorporated into the Tesla production line for the first time, which is expected to reduce production costs for the vehicles involved.
Lingang Phase II plant under construction, domestic Model Y to be listed next year
In the early hours of April 30, Beijing time, Tesla reported its first-quarter results. Tesla’s first-quarter revenue was $5.985 billion, beating market expectations of $5.9 billion, up 32 percent from a year earlier. Under U.S. GAAP, net income attributable to shareholders of listed companies was $16 million, beating market expectations of $200 million, compared with a $700 million loss a year earlier.
Tesla shares jumped 8.72 percent to $870.32 after the results were released, before closing 4.08 percent higher at $800.51.
Under the impact of the outbreak, a number of car companies were hit, Tesla “out of the blue”, the first quarter delivery of 88,496 electric vehicles. Of these, A total of 76,266 models were delivered by Model 3 and Model Y, and 12,230 were delivered by Model S and Model X.
On the production capacity side, Tesla said its Shanghai superplant was operating better than expected and expected model capacity to increase to 4,000 vehicles per week in three years and 200,000 vehicles a year.
Tesla’s Fremont, California, plant has been closed since March 24, but Tesla’s target of delivering 500,000 vehicles by the end of 2020 has not changed.
Tesla’s Shanghai super plant, located in the new area of the Shanghai Free Trade Zone, resumed work on February 10, “after the resumption of work has undergone a restructuring of parts and suppliers, and is now basically stable.” The Tesla Super Factory in Shanghai is currently the only one in the world that is producing Tesla’s entire vehicle, Dowlin said.
“The operation here is critical, we are all producing at the normal speed, has reached a capacity of 3000 vehicles per week. “At the same time, the second phase of Tesla’s Shanghai plant, which is mainly used to produce a new generation of smart electric SUVs, is under construction and is expected to go on sale next year.
At the first-quarter earnings meeting, Tesla CFO Zack Kirkhorn said the cost of producing model 3 at the Shanghai plant in the first quarter was already lower than at the Fremont, California, plant, and there was still plenty of room to reduce production costs.
“We’re going to reduce costs by increasing production, and you’ll see changes in the second quarter to the end of the year.” At present, we have not fully realized the localization of the supply chain, before the full implementation of local suppliers, there is room to reduce production costs. “
In January, The localization rate at Tesla’s Shanghai plant was about 30 percent, and it plans to increase to 70-80 percent by July next year. Tao Lin said that next, the Shanghai plant will be in accordance with the plan to speed up the localization rate of parts, “affected by the outbreak, the rate of localization and the previous plan has some changes, but by the end of this year will achieve most of the localization.” “
As for the partnership with the Nintel era, she said that as things go, Tesla is offering a complete vehicle experience that will certainly ensure that every component meets its needs to perform, that is, to ensure that warranty, performance, and battery life meet Tesla’s standards.
“So when it comes to batteries, Tesla may have other options or other suppliers, but anyone on board will meet Tesla’s supply standards.” TaoLin said.
Original title: Dialogue Tesla Vice President: 30,000 price reduction for applicable policy, Lingang Phase II plant under construction
Journalist Zhang Jing Chen Lingxuan