TESLA Inc. is considering cutting the price of its China-built Model 3 sedans by 20 percent or more next year, Bloomberg News quoted sources familiar with the plans as saying yesterday, betting the move will lure buyers as the world’s biggest electric vehicle (EV) market slows. Tesla aims to bring down costs by using more local components, allowing it to import fewer parts and avoid tariffs, the sources said. Prices of the cars, which will be built in Tesla’s new Shanghai factory and start at 355,800 yuan (US$50,800), will probably be lowered from the second half of 2020, they said. Chief executive officer Elon Musk is counting on the multibillion-dollar Shanghai plant, Tesla’s first factory outside the United States, to give it an edge over the likes of BMW AG and Daimler AG, which are also targeting China with new EV models. The move would also pressure local incumbents such as NIO Inc. and Xpeng Motors to follow suit with price cuts. The scale of the price cuts and the timing could change depending on market situations, the sources said. Much of the cost cuts will hinge on batteries, which are typically the most expensive part of an electric car. Tesla currently relies entirely on Japan’s Panasonic Corp. for batteries but that’s changing as it agreed to buy batteries from an LG Chem Ltd. factory about 320 kilometers northwest of Shanghai, sources said in August. Tesla also struck a pact to use batteries from China’s Contemporary Amperex Technology Co. Ltd. by as early asnext year, people familiar said last month. (SD-Agencies) |