Tesla aims to lower costs in China by using more local components, allowing it to avoid tariffs.
Tesla Inc. is considering cutting the price of its China-built Model 3 sedans by 20% or more next year, people familiar with the matter said, betting the move will lure buyers as the world’s biggest electric-vehicle market slows.
Tesla aims to lower costs by using more local components, allowing it to import fewer parts and avoid tariffs, said the people, who asked not to be identified discussing internal deliberations. Prices of the cars, which will be built in a new factory near Shanghai and start at 355,800 yuan , will probably be lowered from the second half of 2020, they said.
Chief Executive Officer Elon Musk is counting on the multibillion-dollar Shanghai plant — Tesla’s first factory outside the U.S. — to give it an edge over the likes of BMW AG and Daimler AG, which are also targeting China with new EV models. Price cuts would also pressure local incumbents such as NIO Inc. and Xpeng Motors to follow suit.
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