Less than a week after delivering to the first owners, Tesla, known as the “fish” of the new energy vehicle market, is back in the firing. On January 3rd Tesla posted a “price reduction” message on its website, with the price of the standard battery-building and upgraded Model 3 (including the basic ride-assistance feature) made in China reducing the price from 355,800 yuan at the time of the pre-sale to 323,800 yuan.
At the same time, car-ordering consumers can also enjoy 2475 million new energy vehicle subsidies. This means that the purchase price of the domestic Tesla Model 3 has been reduced to less than 300,000 yuan. The price cut will no doubt further boost Tesla’s competitiveness in the Chinese market after it received 27,000 orders in just 20 days after the launch of its home-made Model 3.
“This should be a boon for new energy models that have no competition with them. Wu Hui, general manager of research at the Ivey Institute of Economics, told reporters that Tesla will drive the development of the entire new energy vehicle industry, but will also squeeze the market for its target models, such as NIO and some byd models.
In the domestic new energy market, positioning high-end NIO cars has long been considered the most likely to compete with Tesla. At present, NIO has delivered a total of ES8 and ES6 models, including 70 kwh battery pack, NEDC operating range of 420km NIOES6 models, its subsidy before the price of 358,000 yuan. In accordance with NIO’s previous policy, owners who pay the grand fix at the end of 2019 and licensed on February 29, 2020 will be eligible for subsidies in accordance with the previous policy. This means that the es6, which is equipped with a 70kwh battery pack, will end up at 338,000 yuan.
The home-made Tesla Model 3 has a range of 445km. It is worth noting that the price-reduced domestic Model 3 eliminated the free gift and installation of home charging piles, car owners need to install additional fees to buy. First Financial reporter learned from Tesla’s stores, Tesla enjoys the amount of new energy vehicle subsidies, will also be adjusted according to the national new energy policy adjustment. And the purchase of NIO owners, you can enjoy a lifetime free power change and life-long free warranty, because of the unique DESIGN of NIO car batteries, consumers can also choose to upgrade after the purchase of a car. So it remains to be seen whether Tesla’s “value for money” is more attractive to consumers or NIO’s nanny-style service.
Tesla’s ability to quickly push the price of domestic models down to less than 300,000 yuan is largely due to increased automation rates in Chinese factories and the localization of supply chains. According to previous plans, Tesla’s focus this year is on cost control and preparing for the next phase of growth. Tesla CEO Elon Musk said: “We have learned a lot from the construction of the Shanghai plant, and the average cost of the production process per vehicle is expected to be lower than at this stage in the United States.” “In Tesla’s third-quarter results for fiscal 2019, it was explicitly stated that the cost of Tesla in China would be 65% lower than that of U.S. production.
Tesla’s first domestic model, the Model 3, has reached a 30 percent domestic rate. According to Tesla, the localization rate will reach 70 percent by mid-2020 and 100 percent by the end of the year. Some analysts believe that in the second half of 2020 the price of the domestic Model 3 will be further reduced by about 20%.
Will a further cut in Tesla’s price hit the market for traditional luxury cars, including the BBA? In the U.S. market, Tesla Model 3 sold 127,800 vehicles in the first 11 months of this year, outpacing sales of luxury brands such as BMW, Mercedes-Benz, Audi and Lexus, and the total sales of luxury cars under the single brand.
In the Chinese market, according to china Automotive Technology Research Center released the November 2019 domestic car market insurance data. The NIO brand’s overall number of insurance vehicles in November reached 2,619, of which NIOES6 reached 2,151, ranking 9th among luxury SUVs, behind Land Rover Discovery. NIOES6 has entered the top 10 in the luxury midsize SUV segment for the fourth month in a row. With the popularity of the new energy vehicle market, the market for traditional luxury vehicles will be further eroded by luxury electric vehicles represented by Tesla and NIO.