Tesla China begins taking orders for longer-range Model 3 with price rise

Tesla has started taking orders from its Chinese market for the latest longer-range version of its Model 3 electric vehicle as it seeks to regain its market share in that country.

This comes as the American automotive maker is battling growing pressure from local rivals eating into its share in one of the world’s most competitive premium EV markets.

Tesla responds to market demands

According to Chinese media, the latest Model 3 variant offers a driving range of about 830km, which is a significant jump from 634km that the basic version offers.

On Tuesday, Tesla China revealed the price, currently pegged at 269,500 yuan, which is around $37,500, which is 14% above the standard edition.

“The new variant has a longer driving range, and it is better in performance and efficiency,” Tesla said, adding that customers can now place orders, with deliveries expected to start next month.

This signals the company’s effort to attract the affluent mainland customers who are in search of electric vehicles, increasing demand as the market looks for models that can offer more space as well as travel farther.

Competition from the likes of Li Auto and Xiaomi has put immense pressure on Tesla’s once-dominant position due to their presence in China.

The newly upgraded Model 3 has high performance battery supplied by LG Energy Solution, paired with a single motor boasting higher peak power compared to the previous versions.

Fierce competition is threatening Tesla’s market share

Tesla was once a leader in China’s premium EV market, but things have changed as the firm has seen delivery numbers fall lately.

According to data from the China Passenger Car Association (CPCA), Tesla’s Shanghai Gigafactory shipped 67,886 Model 3 and Model Y vehicles in July to customers in China and overseas. This was 8.4% below the same month in the prior year, and a 5.2% decline from June.

This dip came shortly after Tesla ended an eight-month slump with a brief rise in deliveries in June. Its share of the Chinese EV market also fell sharply. According to figures from the CPCA, it went down to 3.8% in June from 6.9% a year earlier.

In 2020, when the company opened its Shanghai factory, it accounted for 16% of all EV sales nationally.

Gao Shen, an independent Shanghai-based analyst, suggests that Tesla’s new Model 3 and Model Y versions are part of an “adjusted tactic” to attract Chinese consumers in a premium segment now focused less on price, and more on battery technology, digital features, and driver-assistance systems.

“Unlike the mass market, where price competition is fierce, premium models are jostling against each other in terms of battery technology, the sophistication of digital cockpits and the level of driver-assistance systems,” said Shen.

“The new variants of Model 3 and Model Y reflect Tesla’s adjusted tactics for luring Chinese clients.”

Shen.

Looking ahead, Tesla plans to start producing a six-seat SUV variant called Model Y L this autumn. The longer model, measuring close to five metres with a wheelbase of 3.04 metres, aims to offer more room than the current Model Y.

Meanwhile, discounts offered by mainland carmakers have narrowed slightly, dropping from an unprecedented 17.4% in June to 16.7% last month, according to a JPMorgan report. The premium segment saw the biggest reduction in discounts during July.

Tesla’s Shanghai plant, its largest factory worldwide, currently assembles only the Model 3 and Model Y.

In contrast, Beijing-based Li Auto recently launched its six-seat fully electric Li i8 SUV, targeting families with multiple children who want bigger battery-powered vehicles. Priced between 321,800 yuan and 369,800 yuan, the Li i8 offers a driving range of up to 720km.

This domestic competition is part of a broader trend as Chinese EV makers focus on premium family vehicles, intensifying the fight for market share with Tesla.

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