Tesla has now officially opened up orders for its hugely anticipated Model 3, in China. The report first came in from Reuters, and the same is also available on Tesla’s Chinese website.
In order to book the Model 3, Chinese customers will be required to pay a deposit of 8000 Yuan (~$1150 USD). The news resulted in some healthy gains for Tesla shares, which rose 1.6 pct at $353.93 in morning trading. Elon Musk himself confirmed the same via his usual method — tweets. He mentioned “Probably some deliveries in March, but April is more certain”, when quipped by a user about delivery dates in China.
China is a huge market for electric auto makers, and Tesla’s push has been a long time coming now. The country already manufactures the most electric vehicles globally, and given the Chinese Government’s push towards an all electric vehicle policy by 2030, Tesla’s arrival couldn’t be at a better time.
However, China hasn’t been the best of Tesla’s market. The company first began delivering Model S vehicles to China in 2014, and opened numerous stores and service centres. This also resulted in Tesla hiring over 600 employees for laying the groundwork and selling its Model S product. The reception however, was mixed.
Tesla sold an estimated 3,500 cars in 2014, below its sales goal and behind electric and plug-in hybrid vehicles produced by Chinese rivals BYD and BAIC. The company then continued these dragging sales figures in 2015 as well. Then came 2016 when Tesla witnessed a turn-around and tripled its sales as compared to previous years.
But then, its 2018 and the US-China trade tensions have eaten up every American tech company’s growth. Tesla is no exception.
Tesla on its part, has been making quite the efforts to appease Chinese and make the country one of its major markets. The third gigafactory for example, is coming up in China and is expected to roll out over 500,000 EVs once operational to its maximum potential.
With this, Tesla not only hopes to bring down manufacturing costs, but also gain other material advantages when it comes to selling its electric vehicles in the country. The Gigafactory 3, which will be built on the 210-acre stretch received by the company, will allow it to bypass certain tariffs, as well as shipping costs.
With this, the company will also receive access to cash incentives that are only available to locally produced electric vehicles, a category Tesla will fall in once its Gigafactory 3 is up and running. Meanwhile, the facility is expected to produce 500,000 electric vehicles a year at full capacity. However, Tesla has said that it will take 2-3 years to construct it, and another 2-3 years to get it running at full potential.
Founder of the The Tech Portal. Now a consulting editor for the platform. Has advised and worked with numerous early/mid-stage startups during past 5 years in various roles. You can click on his LinkedIn profile and drop in a message to get in touch.