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Tesla Motors, Inc. (NASDAQ:TSLA), NIO Inc. (NYSE:NIO) – Tesla Unlikely To Cut Model 3 Prices In China, Leaves Door Open For Increases: Report


The streak of price cuts #Tesla #Inc (NASDAQ: TSLA) has been announcing for its #Model 3 vehicles in #China since late last year may soon come to an end.

#What #Happened: #With #Tesla’s localization rate, or the proportion of parts made in #China, having hit its target, the electric vehicle giant is unlikely to cut prices in the near future, state-owned #Chinese news outlet #Yicai #Media said, citing #Tao #Lin, #Tesla’s #China vice president.

The price of EVs largely hinges on the price of raw materials and components, and if these escalate, price hikes of #Tesla EVs cannot be ruled out, #Lin reportedly said.

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#Since #Tesla began making #Model 3 vehicles in #China, the company has made five price cuts between #October 2019 and #October of this year, the report said.

#This has taken down the price of #Model 3 vehicles from 355,800 yuan ($54,4744) to 249,900 yuan ($38,260) in the country.

#Related #Link: #Why #Tesla #Is #Unlikely #To #Buy A #Traditional #Automaker #Outright

#With the cost of making a #Model 3 EV in #China working out to roughly 200,000 yuan ($30,620), the gross margin for the #China-made EVs is estimated to be roughly 30%, which is higher than what is achieved with the U.S.-made EVs, the report said.

#Click here to check out #Benzinga’s EV #Hub for the latest electric vehicle news.

#Why #It’s #Important: #China, according to analysts, is key for #Tesla’s growth thesis. #Following the launch of the #Shanghai #Gigafactory, the company has made strong inroads into the #Chinese EV market.

#Tesla has also managed to keep at bay homegrown competitors such as #Nio #Inc – ADR (NYSE: NIO), and #Xpeng #Inc – ADR (NYSE: XPEV).

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The lack of leverage with respect to pricing could place #Tesla at a disadvantage, especially as the #Chinese EV makers have come out with guns blazing to take on their foreign rival.

#Related #Link: #Analyst #Says #Tesla’s $5B #Stock #Sale #Is #Smart #Strategic #Move

© 2020 #Benzinga.com. #Benzinga does not provide investment advice. #All rights reserved.



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https://www.benzinga.com/tech/20/12/18953891/tesla-unlikely-to-cut-model-3-prices-in-china-leaves-door-open-for-increases-report

##Tesla ##Motors #NASDAQTSLA #NIO #NYSENIO ##Tesla ##Cut ##Model ##Prices ##China ##Leaves ##Door ##Open ##Increases ##Report

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