Tesla cuts Model 3 and Model Y prices in China

The rumors were swirling for a couple of weeks that Tesla was considering lowering its prices in China and now they've been proven true. The Model Y dropped below RMB 300,000 and thus qualifying for EV subsidies.

Tesla Model 3 in the entry RWD trim is priced now at RMB 265,900 ($36,700) with the EV subsidies already included. That is a reduction of RMB 14,000 or nearly $1,930 or 5.3% if you like the numbers game.

The dual-motor AWD Model 3 Performance demands RMB 349,900 or nearly $48,200 at current exchange rates. That is RMB 18,000 less than last week or nearly $2,500 or again just over 5.1% price reduction.

That’s great news for Chinese customers but the biggest winner is Tesla Model Y which in its entry trim for the first time will be available with EV subsidies. The new price for the RWD model is RMB 288,900 or a smidgen under $40,000. This is the most aggressive reduction in the range with a RMB 28,000 cut from the original price (just over $3,850) of RMB 316,900 or nearly 9%.

This price reduction has brought the Model Y for the first time within the threshold of RMB 300,000 to qualify for the EV subsidy. This clearly is a decisive move on the part of Tesla and will get more customers away from the competition.

In addition to lower prices, Tesla is including the silver paint free of charge for the Model Y buyers, which previously was a cost option (RMB 8,000). All other models are available in black as the only no-cost option.

The AWD Model S Performance has seen its price reduced by RMB 20,000 down to RMB 397,900 (just under $55,000) - a 4.7% difference.

Tesla denied the previous rumors about the price reductions, but clearly it was just to keep the customers coming rather than waiting for lower prices. However, this is not going to sit well with many of the buyers who made the purchase within the last few days.

Tesla’s competition is growing in China, the company has lost as much as 50% of traffic to its stores according to local media. The company is trying as hard as it can to fight off the competitors, it introduced insurance subsidies and zero-interest financing, but clearly it wasn’t enough.

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