Tesla, China & Model 3

In the past few weeks, many of my friends and followers have asked me when Tesla Model 3 started to produce in China, how’s the demand will there be? How many units can Tesla Model 3 sell in China in one year?

Firstly, we can take a look from the luxury four-door sales data of the United States in the past few months.

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From Cleantechnica.com’s (https://cleantechnica.com/) data shows that Tesla Model 3 has been selling far more than other rivals since July 2018, including BMW 3 & 5 series, Mercedes Benz C-class, Audi A4 and others mid size luxury sedans.

To accurately estimate how many units Tesla Model 3 can sell in China in one year, we can use the data from the top four Tesla competitors’ sales data in China for comparison.

 

Mercedes Benz C-Class (in China)
MSRP: 310K-487K RMB (around $45600-$71600 USD)
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(source: http://carsalesbase.com)

 

BMW 5 Series (in China)
MSRP: 437K-664K RMB (around $64300-$97600 USD)
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(source: http://carsalesbase.com)

 

Audi A4 (in China)
MSRP: 290K-410K RMB (around $42600-$60300 USD)
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(source: http://carsalesbase.com)

 

BMW 3 Series (in China)
MSRP: 287K-484K RMB (around $42200-$71100 USD)
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(source: http://carsalesbase.com)

 

According to the information provided by Tesla, in the past few months, top trade-in for Model 3 included Honda Accord and Civic. Let’s also take a look at Honda Accord and Civic sales data in China.

 

Honda Accord (in China)
MSRP: 170K-260K RMB (around $25000-$38300 USD)
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(source: http://carsalesbase.com)

 

Honda Civic (in China)
MSRP: 116K-170K RMB (around $17000-$25000 USD)
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(source: http://carsalesbase.com)

When Tesla is ready to produce Model 3 in China, not only can save most of the import tariffs and transportation costs, also Chinese customers even possible to receive the government’s subsidy. The conservative estimate is priced at $32,000-$60000 USD. The annual demand will be in between 200,000 and 250,000 units per year(China market only).

 

In China

From China National Manufacturing Power Construction Strategy Advisory Committee: With the large-scale popularization of new energy vehicles in the fields of family cars, commercial vehicles and buses, taxis, and logistics vehicles, the annual sales volume of new energy vehicles in China will reach more than 5% of the total automobile market demand in 2020. In 2025, it will increase to about 20%. Under the national carbon emission target and the primary energy substitution catalogue, the annual sales volume of new energy vehicles will continue to increase significantly in 2030, with a scale of more than 10 million vehicles.

In 2017, the total sales volume of China’s new energy vehicles reached 777,000 units, a year-on-year increase of 53%. It has been ranked as the world’s largest producer of new energy vehicles for three consecutive years.

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(picture from Bloomberg)

 

“The pricing of many EVs in China are close to Tesla Model 3, and about 300k RMB ($44,000 USD). Once Tesla starts mass production(in China), it will have a direct impact on domestic car companies.” Jia Xinguang, executive director of China Automobile Dealers Association said.

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Tesla GigaFactory Shanghai & Chinese Government

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July 2018, China Shanghai government with Elon Musk and Tesla team signed a pure electric vehicle project investment agreement. Target to produce 500,000 Tesla EVs a year in China.

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(Shanghai Mayor Ying Yong and Elon Musk)

 

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During the same month, Shanghai Municipal Party Committee Secretary Li Qiang met Elon Musk, expressed his congrats on the official signing of Tesla China Gigafactory. Also looking forward for further expand all-round cooperation to promote mutual benefit.

 

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July 12th,2018 Chinese Vice President Wang Qishan met Elon Musk & Tesla team. Had a wonderful meeting with senior Chinese leaders and had a very insightful communication on the long-term development of the future.
Video : https://www.youtube.com/watch?v=C5p3uiq3_tI&app=desktop

 

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Also, Beijing Mayor Chen Jining met with Elon Musk on July 13th,2018, expressed his hope that the two sides will strengthen cooperation in the fields of EV tech & urban green development also will fully support Tesla’s development in Beijing. Tesla also announced will gradually expand the scale of Beijing R&D center.

 

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August 2018, an official video from China Shanghai government mentioned Shanghai government will fully assist Tesla to build Gigafactory in China Shanghai Lingang and put it into production as soon as possible.
video: https://v.qq.com/x/page/j0754tsjcjd.html

 

3 thoughts on “Tesla, China & Model 3

  1. Nice summary of projected Tesla demand in China. I have been somewhat in the dark how Tesla model 3 compares to other foreign brands, cost and feature wise. Looks like the model 3 is going to be huge in China! Thanks for your efforts!

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  2. Thanks for the summary. Interesting to see some thought going into this.

    One thing that will affect the figures is how long it takes Tesla to open the factory in China. They made some noise about accelerating it and starting production in 2019, but didn’t really narrow it down any further than that, so it’s a big window.

    Without any further details, I have to assume it’ll be the tail end of 2019. I know we saw how quickly Tesla can move with these things when they put up “The Tent” this year, but that was just an assembly line, not an entire factory; it won’t be so quick to build a paint shop or battery plant.

    That said, I’m very interested to hear what progress is being made. I’ve heard rumours on one side of the groundwork being started on the site, but also conflicting rumours that the land hasn’t been touched since they bought it. The latter seems unlikely to me, knowing Tesla, but some hard facts would really help.

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