Chinese Tesla Rivals Say They Aren’t Scared of Cheaper Model 3

By Zheng Lichun and Zhao Runhua / May 31, 2019 06:23 PM / Business & Tech

Cheaper Tesla cars set to hit the Chinese market soon could lure price-sensitive buyers away from traditionally more budget-friendly domestic brands, but local electric-vehicle makers Nio and Xpeng say they aren’t fazed by the change.

Tesla announced Friday that its China-produced Model 3 cars would start at 328,000 yuan ($47,488), 13% cheaper than the imported cars it currently sells in the country. Customers can expect to receive their cars in six to 10 months.

The basic non-imported Model 3 is priced close enough to the mid-range of China’s domestic electric vehicle offerings to snatch some prospective buyers away from local brands, analysts say.

However, Nio and Xpeng, Tesla’s major local competitors, have brushed off the threat from Tesla.

“To be honest, I think the 328,000 yuan China-produced Tesla... has no competitiveness at all. Tesla should have further lowered the price by $10,000,” Xpeng chairman He Xiaopeng said on his WeChat account, adding that Xpeng’s cars were on par with the Tesla Model 3 in terms of battery quality and operating system.

Meanwhile, Nio is confident about its vehicles’ competitiveness even with the cheaper Model 3 in the picture, a company representative told Caixin.

Tesla opened a car factory near Shanghai, its first outside of the U.S., earlier this year. The entry of locally-made Teslas into the Chinese market is set to mitigate some of the effects higher import tariffs have had on the company amid an ongoing trade war.

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