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Published on May 31st, 2019 | by Dr. Maximilian Holland


Chinese Tesla Model 3 Price Crushes BMW 3 Series & Mercedes C-Class Prices

May 31st, 2019 by  

Tesla has just launched pricing and ordering for the Tesla Model 3 that will be made in the Shanghai Gigafactory. The 328,000 RMB ($47,475) price for the Standard Range Plus is before local incentives, and crushes fossil rivals in the same class and without somewhat similar specs, the BMW 3 Series and Mercedes C-Class (also both locally made in China).

Tesla Model 3 order page in China (text is auto-translated and may include errors) — Click to Zoom

The price comes in at a saving of 49,000 RMB ($7,100) compared to the currently available imported Model 3 Standard Range Plus. The effective cost to the consumer will be further reduced by a variety of local incentives that vary by city and province. Imported EVs typically have less or no access to these local incentives.

The pricing is set to significantly undercut other international-brand premium sedans in the China market:

Whilst the base BMW 3 Series and Mercedes C-Class have similar starting prices to the Tesla Model 3 Standard Range Plus, the specifications of their base models are far too low to be considered peers. The closest matched Mercedes, the C300L sport (0 to 100 km/h in 6.4 seconds) starts from an MSRP of 474,800 RMB. That’s 45% more expensive, and without Autopilot and other features that come standard with the Tesla — and it’s still almost a second slower. The closest matched BMW appears to be the 330i xDrive M (0 to 100 km/h in 6.2 seconds), starting from 449,800 RMB. That’s 37% more expensive, and also doesn’t have the tech features or acceleration of the Tesla.

EPA ratings give these fossil vehicles fuel consumption ratings of around 9 liters / 100km (27 MPG) at best. Owners driving 15,000 km per year will thus spend 9,700 RMB  ($1,400) per year on fuel (@ ~7.6 RMB per liter). With electricity priced around 0.5 RMB (7.2 US cents) / kWh in China, the same annual driving in the Tesla (consuming ~160 Wh/km) will cost just 1,200 RMB (around $175). Essentially, the Tesla is likely to save around 8,000 RMB (around $1150) every year in fuel costs compared to fossil “alternatives.”

So, the Tesla has better technology, better performance, a much lower purchase price (even before considering local incentives) and much lower running costs than premium fossil counterparts from BMW and Mercedes. It also has better safety, will improve significantly over time (via over-the-air updates) and will have significantly better residual value (pollution restrictions are increasing all the time in Chinese cities).

Savvy Chinese consumers apparently understand all of this — the Tesla Model 3 order page has been overloaded for the past several hours. Tesla is currently indicating a 6 to 10 month delivery estimate for the locally produced vehicle, in line with the planned scaling up of production in Shanghai towards the end of 2019 and early 2020. Have you ordered the Tesla Model 3 in China? Please join in the comments to share your thoughts.

Editor’s note: The most common and loudest claim from Tesla [TSLA] bears lately has been that demand for Tesla vehicles has dropped. In my opinion, it would make no sense to open up ordering for Chinese-built Model 3’s that won’t be delivered for another 6–10 months and will crush orders for US-built Model 3’s that have not already been placed. It makes no sense … if there’s a demand problem.

On the other hand, if Tesla has more demand than supply, opening up ordering for the Chinese-built Model 3 half a year in advance is fine since Tesla will still ship as many cars as it can produce in the meantime while gathering data on how much demand there is solely in China for Chinese Model 3’s and, thus, what to initially tool up for in the gigafactory. 
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About the Author

Max is an anthropologist, social theorist and international political economist, trying to ask questions and encourage critical thinking about social and environmental justice, sustainability and the human condition. He has lived and worked in Europe and Asia, and is currently based in Barcelona. Find Max's book on social theory, follow Max on twitter @Dr_Maximilian and at MaximilianHolland.com, or contact him via LinkedIn.

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