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Why Is Tesla Cheap in China?

Published by Tamar Hela.

If you live in China, buy a Tesla. Tesla vehicles are surprisingly cheaper in China than in America.

Why? It sounds counterintuitive because China is known for its high tariffs and taxes on imported goods.

Yet, there are more factors involved than just lower taxes and tariffs. In actuality, different things influence Tesla's lower prices in China.

This article will examine why Tesla is less costly in China and what that means for the country's further advancement of electric cars.


Why Is Tesla Cheap in China?

As its automobiles cost more than many other cars, Tesla is sometimes seen as a luxury automaker. However, China enjoys a lower price for Tesla cars than other countries.

This is due to several aspects:

  • Government subsidies
  • Local suppliers deals
  • Industry innovations
  • Savvy business strategy
  • Standard model features

Let's go into more detail to fully understand these aspects that affect the Tesla price in China.

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Government Subsidies on Electric Vehicles

Thanks to generous Chinese government incentives and support, EV owners in China can purchase cars from brands like Tesla at some of the lowest prices available worldwide.

For example, buyers may be eligible for up to 20% off on their EV purchase after applying for a subsidy.

Plus, local governments may also offer additional discounts on top of that.

These government subsidies have been instrumental in helping Chinese consumers adopt EVs at an increasing rate. Thanks to these subsidies, people are now buying EVs because they're cheaper, boosting the local economy and clearing the air with less pollution.

As more people buy EVs because they are cheaper, the local economy will benefit from less pollution and cleaner air.

Grace Tao, Tesla's vice president of external affairs in the region, has described the government's policies as "instrumental in driving our success." Her involvement with the social media platform Weibo and other digital strategies have also helped the brand gain traction in the country.

This strategy of making EVs more affordable for everyone has the ultimate endgame in reducing the country's dependence on traditional fossil fuels. The unprecedented access to affordable EVs from government subsidies will hopefully create a greener future for its citizens.

Local Supplier Discounts

In addition to government subsidies, local suppliers in China have also been offering discounts on Tesla cars. No wonder—many components in Tesla vehicles come directly from within the country.

It's all due to the Shanghai Gigafactory, Tesla's largest production facility in China. It purchases many components at discounted rates due to its close ties with local suppliers.

The largest EV market in the world is in China, and regional vendors are ready to cooperate with Tesla to provide them with the supplies they want. This helps Tesla maintain lower production costs and pass on those savings to buyers.

Tesla's partnerships with Chinese companies (CATL, BYD) to source their batteries and other components come at a lower cost than suppliers outside China.

As a result, local suppliers are eager to offer customers discounts to maintain their business relationship with Tesla. These discounts range from a few hundred Yuan to several thousand, leading to significant savings for buyers.

Buyers in China can purchase Tesla vehicles at some of the lowest prices available worldwide.

Industry Innovations

The Chinese EV market experienced a lot of innovation in the last decade. Businesses like Tesla have introduced new technology and features to make EVs more effective, dependable, and inexpensive.

Tesla CEO Elon Musk's ambitious and tenacious business approach has resonated with China's tech-savvy customers. And Musk's ambitious projects like SpaceX have earned him respect among Chinese entrepreneurs. The Chinese EV market is welcoming this manufacturer with open arms.

It's no surprise that many Chinese companies have sought partnerships with Tesla or even invested in the company itself.

Chinese businesses have also been testing out new battery technologies that might help increase the performance and range of electric vehicles. This is leading to longer-lasting batteries that are cheaper than ever before and making EVs more accessible to customers.


Savvy Business Strategy

Tesla's business strategy in China is also helping keep prices low. The company can take advantage of the country's vast manufacturing capabilities through its various partnerships and collaborations with local companies.

The locals help Tesla build its high-quality automobiles more economically, resulting in competitive retail prices.

Tesla's aggressive market positioning has also helped to keep prices down. The company has worked hard to build brand loyalty, and its cars have become a status symbol among China's affluent consumers.

In addition, Tesla has made sure to tailor its marketing campaigns specifically for Chinese customers. The company can maintain a strong presence by understanding what appeals to Chinese consumers and targeting them with tailored messaging.

It's this savvy business strategy that helps Tesla's reputation as an affordable option in China's EV market.

This trend will likely continue with more Chinese companies investing in Tesla and its products gaining popularity.

Tesla Model Lineup in China

Ultimately, the brand's popularity in China's electric vehicle market owes to the design. The Model lineup performs exceptionally well, along with other series and models.

From the 3 Series to the S model, and now the X series, Tesla has provided a wide range of options to suit all budgets and preferences.

The Tesla lineup offers something for everyone in China, from those looking for an affordable EV to luxury car seekers. With these cars becoming increasingly accessible thanks to government subsidies, now is the perfect time to switch to an EV.

All models come equipped with an automatic pilot as standard, allowing drivers to travel more comfortably.

The Tesla Model 3 is among the most popular EVs due to its affordability and loaded standard features. The standard China-made Model 3 includes many features that attract Chinese consumers.

Meanwhile, the Model S and X series offer superior performance and style for those looking for something more luxurious.

Standard Chinese Model 3 features

These standard Model 3 features include:

  • Automatic pilot
  • 2 electric motors
  • All-glass panoramic roof
  • 15-inch touchscreen display
  • Driver automation systems
  • Programmed emergency braking
  • Adjustable cruising features
  • Automatic lane assist
  • Extended battery and drive unit warranty

The automatic pilot is a semi-autonomous driving system. The dual electric motors can aggressively accelerate the vehicle to a hundred kilometers per hour in under three seconds. The top speed is just shy of 260 km/hr.

Moreover, the Model 3 has a panoramic top made entirely of glass that lets passengers see the sky while driving. The 15-inch touchscreen display gives drivers all access to various features and settings.

In terms of safety, the Model 3 has several driver automation systems that can help prevent accidents. This automation includes programmed emergency braking, adjustable cruising features, and automatic lane assistance.

Warranty coverage is also provided on the battery and drive unit, giving customers peace of mind that their car will be reliable.

The Tesla Model 3 is an appealing alternative because of all these qualities for Chinese consumers seeking an affordable yet reliable EV.

American Market vs. Chinese Market

The US market and the Chinese market differ significantly when it comes to the EV market.

With Tesla's market position as a premium brand in America, its vehicles have premium prices.

However, Tesla has worked hard in China to keep prices down by using aggressive market positioning and tailoring its marketing campaigns specifically for Chinese customers.

The American government has clashed with Musk in the marketplace, and there have been several reports of American customers being overcharged for Tesla cars. This conflict has caused a backlash against the company and, As a result, decreased sales in America.

Moreover, the US market has also complained about the quality of Tesla's products. Customer satisfaction has gone low because of this, with some customers looking elsewhere for their EV needs.

Meanwhile, in China, Tesla is the more affordable option than its American counterparts, and the company has sought to address customer complaints with improved quality control. As a result, its loyal Chinese fanbase appreciates the low-cost vehicles that Tesla offers.

Furthermore, the Chinese government has embraced Tesla, providing generous subsidies and incentives to customers looking to purchase electric vehicles.


Tesla Import Shipping

Tesla's deliberate choice to localize production and save costs is one of the reasons it is so inexpensive in China, in addition to government subsidies.

The increasing demand for electric vehicles and Tesla's commitment to sustainability, innovations, savvy business strategies, and overall popularity keep the Chinese market returning for more.

Tesla is making it simpler for more people to adopt electric vehicles and lessen their carbon impact by providing inexpensive rates in China.

Importing a Tesla car from China is easily done with the expert services ofA1 Auto Transport. Their international shipping services are now serving over 190 countries.

Get your free international shipping quote today.

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Tamar Hela is one of our featured writers at A-1 Auto Transport, researching everything from AI auto shipments out of China to what paperwork is required to move long distance. We can safely say she's become well versed in all things shipping and logistics while making the information easy to digest and understandable. 

Tamar has been a copywriter for over 16 years and was trained in the 7-Figure Copywriting Accelerator course through American Writers & Artists, Inc. (AWAI). She's also an incredibly seasoned copyeditor, having previously been the Chief Editor and Publishing Director for Cosby Media Productions, based in Atlanta, Georgia. 

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