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21 August
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Tesla reduced prices for Model 3 in China

However, it is still higher than in the US ($38,990 vs $47,700)

Photo: Reuters

/NOVOSTIVL/ Tesla cut prices for its Model 3 sedans worldwide on Tuesday including in China, as the company readies trial production of the electric vehicle at its Gigafactory in Shanghai. This article appeared in the Nikkei Asian Review.

Tesla's China website shows that the starting price of its best-selling Model 3 has been lowered by 5.6% to 355,900 yuan (about $51,770).

A China-made version of the Model 3, which is available only by preorder as production is still pending, kept its price at 328,000 yuan (about $47,700).

That's still higher than the Model 3's U.S. starting price, which now stands at $38,990.

The American electric-vehicle maker is "adjusting our pricing in order to continue to improve affordability for customers," a spokesperson for Tesla said in a statement.

The global price cut could have particular significance in China, the world's largest electric-vehicle market, where Tesla faces increasing competition from local rivals including Nio and Xpeng Motors as well as the imminent phaseout of EV subsidies from the Chinese government.

However, Tesla's previous price cuts in China prompted a backlash including in March, when many customers who bought vehicles prior to the changes demanded compensation for the price difference.

Tesla's latest adjustment comes as Xpeng faces similar customer protests, after the Chinese EV startup priced its higher-performance new model, G3 2020, around the same level of its predecessor, G3 2019. Owners of the old model turned up in droves this month at Xpeng's headquarters in Guangzhou to protest, Chinese media reported.

Nio has been grappling with its own troubles. The EV maker announced a recall last month of nearly 5,000 ES8 units over battery safety concerns, and was reportedly hit with the departures of two executives recently.

Earlier this month, Tesla reported record deliveries in the second quarter of 2019, including 77,550 Model 3 units.

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