Tesla Cuts Prices In China, Cybertruck Battery Production Begins In Fremont

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According to CnEVPost, Tesla has reduced prices on the Model 3 sedan and Model Y SUV manufactured at its factory in Shanghai. It cites a report by Huxiu, a Chinese technology media source that claims Tesla is experiencing increased competition from local manufacturers. Huxiu, in turn, cites a report by Sun Shaojun, founder of local car consumer platform Che Fans, who said fewer customers were shopping at Tesla stores. Compared to this spring, when 30 to 35 customers were visiting daily, now that number is down to 15 to 17 per day. “Local Chinese brands are growing too fast and putting Tesla up against a wall,” Sun said.

The price of the entry level Tesla Model 3 with a single motor is now RMB 265,900 ($36,690) after subsidies, down from the previous price of RMB 279,900 ($38,321), according to the Tesla China website. The starting price for the dual-motor, all-wheel-drive Model 3 Performance is RMB 349,900 ($47,905), down from the previous RMB 367,900 ($50,369).

The entry level rear-wheel-drive Model Y now lists for RMB 288,900 ($39,557) after subsidies, down from RMB 316,900 ($43,391) previously. CnEVPost notes that the base version of the Model Y was not eligible previously for China’s purchase subsidy, as it was priced above RMB 300,000 ($41,077). Only cars that support battery swapping are eligible for the subsidy if they sell for more than that price.

In addition to lowering the price of the entry level Model Y, Tesla is also offering the silver paint, which previously cost RMB 8,000 ($1,095), for free in addition to the black paint. All Model 3 and other versions of the Model Y are currently only available in black paint for free.

The new starting price for the dual-motor, all-wheel-drive Model Y Long Range is RMB 357,900 ($49,011), down from RMB 394,900 ($54,077) previously. The latest starting price for the dual-motor, all-wheel-drive Model Y Performance is RMB 397,900 ($54,488), down from RMB 417,900 ($57,227).

On the configurator pages for the Model 3 and Model Y, Tesla reminds consumers at the top that China’s national purchase subsidy policy for “new energy vehicles” will end on December 31, and vehicles that receive a license plate after that date will not be eligible for subsidies. Tesla China also shared information about the vehicle price adjustment on its Weibo today, and said that new orders starting today will not be eligible for the insurance subsidy previously offered.

Tesla has been raising prices everywhere else, so reducing prices in China is big news. Perhaps this is partly a reaction to the fact that EV incentives are largely going to disappear in China at the end of this year and Teslas needed a price cut to qualify, so maybe we shouldn’t read too much into this. Delivery statistics for the fourth quarter will probably give a better indication of how Tesla is doing in China than speculation in trade publications.

Cybertruck Battery Production In Fremont

Tesla Cybertruck

In other Tesla news, Teslarati reports that its sources say the company has begun building battery packs for the Cybertruck on a new cell manufacturing line at the factory in Fremont.

Tesla is planning to build the Cybertruck in Austin at Gigafactory Texas starting in the middle of next year, but those sources tell Teslarati the battery cells and cell pack manufacturing are not yet ready to take off at the new Tesla factory. Tesla applied for permission to build a battery and cathode manufacturing building at Gigafactory Texas earlier this year. While that project has been started, it is likely it won’t be ready by the time the Cybertruck is scheduled to launch.

Sources familiar with the matter told Teslarati the second floor manufacturing line that Tesla proposed to the city of Fremont in August will manufacture the Cybertruck packs. Tesla will take the 4680 battery cells produced at the Kato Road facility or another previously utilized cell design manufactured at Gigafactory Nevada and put them into modules and packs that are manufactured on the new Fremont battery line. That assembly line is currently nearing completion. The sources also said the Cybertruck battery pack line is currently being tested with Tesla’s automation equipment.

Tesla’s Vice President of Powertrain, Drew Baglino, detailed earlier this year that the company was not constrained in terms of 4680 battery cell availability. “So, throughout 2021, we focused on growing cell supply alongside our in-house 4680 effort to provide us flexibility and insurance as we attempt to grow as fast as possible,” Baglino said on the Q4 and Full Year 2021 Earnings Call in January. “4680 cells are not a constraint to our 2022 volume plans based on the information we have.”

The Kato Road facility has supported Tesla’s in-house 4680 cell needs thus far. The 4680 packs were installed on some Gigafactory Texas–built Model Ys, and were reviewed by Munro Live earlier this year. Fremont will likely support Cybertruck pack manufacturing for some time, utilizing cells from Kato Road and from suppliers like Panasonic when they ultimately begin manufacturing the battery for Tesla.


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Steve Hanley

Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. He is proud to be "woke" and doesn't really give a damn why the glass broke. He believes passionately in what Socrates said 3000 years ago: "The secret to change is to focus all of your energy not on fighting the old but on building the new." You can follow him on Substack and LinkedIn but not on Fakebook or any social media platforms controlled by narcissistic yahoos.

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