China Automobile Association: Tesla's localization has a great impact on Chinese brand cars

google translating from Chinese news. China is the largest EV market so far. It gives different view of Tesla's future.


China Automobile Association: Tesla's localization has a great impact on Chinese brand cars
Source: China Securities Journal

On March 11, Xu Haidong, assistant secretary-general of the China Association of Automobile Manufacturers, told the China Securities Journal that Tesla's price cuts and the establishment of a factory in China were a big impact on China's own brand cars. Due to the good brand effect and marketing ability of Tesla, if the Shanghai factory can reach 500,000 units in the future according to the previous plan, it will aggravate the competitive pressure of the domestic new energy vehicle market. Under such circumstances, independent brands should take countermeasures to improve product competitiveness as soon as possible.

On March 1st, Tesla announced that the model S, Model X and Model 3 were sold for a total of eight models for price adjustment and announced several new sales policies. The Model 3 price cut in China ranged from 26,000 yuan to 44,000 yuan, the Model S price cut range was 113,000 yuan to 277,500 yuan, and the Model X price cut range was 174,500 yuan to 341,100 yuan. Among them, Model X P100D price reduction of 341,100 yuan, a decline of 29%. This is Tesla's biggest decline since last year.

However, today, Tesla sales staff told China Securities Journal that on March 18, in addition to the $3 million entry-level Model 3, the price of Tesla's full-line models may rise by 3%.

The Tesla Shanghai plant has broken ground this year and will start production of Model 3 before the end of the year. The initial phase plans to produce about 3,000 Model 3 per week. After full operation, the annual output will climb to 500,000 pure electric vehicles. The price of the Model 3 is expected to decrease further. Based on confidence in the Chinese market, Tesla expects to deliver 360,000 to 400,000 vehicles in 2019, an increase of 45% to 65%.

Analysts said that with the release of production capacity, scale effect, etc., the domestic price of Model 3 may fall to around 300,000 yuan.

CITIC Securities pointed out that after the localization of Tesla, the price of Model 3 will be further explored, and the pressure of luxury brands such as Mercedes-Benz, BMW, Audi and Weilai Automobile will further increase.