Tesla Model 3 Goes On Sale In China; Tesla’s Lowest-Priced Version Of Model 3 Is Still Very Expensive

FILE PHOTO: A Tesla Model 3 car is displayed during a media preview at the Auto China 2018 motor show in Beijing
FILE PHOTO: A Tesla Model 3 car is displayed during a media preview at the Auto China 2018 motor show in Beijing, China April 25, 2018. REUTERS/Jason Lee/File Photo (Photo: REUTERS/Jason Lee/File Photo)

The Tesla Model 3 has a high demand in China, the world's largest automotive market. It is not surprising that Tesla is doing everything it can to deliver the Model 3s there, and as such, the base trim Model 3 has officially gone on sale. However, the cheapest variant of the Model 3 is still quite expensive due to the tariffs.

According to a report from Reuters, Tesla has started taking orders for the long-range, rear-wheel drive Tesla Model 3. The base trim Model 3 variant costs around $35,000 in the US but has a price tag of about $64,300 (433,000 Yuan) reportedly due to the trade friction between China and the US.

The base trim Tesla Model 3 is a lot less expensive than the Model 3 Performance which costs around $63,000 (427,000 Yuan) in the US, and costs around $83,000 (560,000 Yuan). The all-wheel-drive long-range version of the Model 3 that is currently on sale in China costs around $74,000 (499,000 Yuan).

According to the Tesla officials, the sale of the electric vehicle company in China suffered a major hit when Beijing increased the tariffs on vehicles imported from the US to 40 percent. China has since reduced the tariffs to 15 percent, at least for the time being.

Tesla, meanwhile, responded by adjusting the prices of the US-made vehicles so as to allow their models to remain competitive in the Chinese market. The move also allowed Tesla to keep the domestic electric vehicle companies at bay.

Still, the cost of the long-range, rear-wheel drive Tesla Model 3 is still at the high end of the price spectrum. Tesla CEO Elon Musk has gone on record to suggest that the US and China need to have some "sort of a truce on the tariff war."

A source familiar to the situation revealed that Tesla has sent a cargo plane and two ships loaded with Model 3s to China to answer the demand for the long-range, rear-wheel drive Tesla Model 3.

Tesla is also currently building a factory in Shanghai that is designed to build the Model 3 EVs in the initial phase. The Shanghai factory is reportedly going to be operational in the second half of 2019 and aims to produce 3,000 Model 3 units per week.

Despite the trade dispute and the high tag price of the long-range, rear-wheel drive Tesla Model 3, the demand for Tesla's electric vehicle remains high. And regardless of the result of the tariff dispute between Washington and Beijing, or the success or failure of Tesla's operations in Shanghai, it is clear that China would reap the benefits by having Tesla aboard.

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