Tesla launches Shanghai Model 3 deliveries

Tesla has started deliveries of the first Model 3s produced in the Shanghai plant to customers. The first 15 vehicles were handed over to Tesla employees during a special event. According to a Reuters report, regular customers will also receive their vehicles from 7 January onwards.

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Tesla had previously said that Model 3 deliveries would first start just before the Chinese new year from 25 January. Now, it seems, Tesla Inc will deliver the Model 3 to the public on 7 January, kicking off with a special event at its Shanghai plant, Reuters reported citing a representative for the firm yesterday.

On Monday this week, Fifteen Tesla employees who had purchased the car were the first to take delivery of the first China-made electric cars that began rolling off the plant’s production line in October. The Model 3 is priced at 355,800 yuan (50,000 USD / 44,883 euros) before subsidies. Wang Hao, Tesla’s China general manager, said the company plans to ramp up Model 3 deliveries in January.

Meanwhile, the Tesla Model 3 produced in China has also received official exempt from the vehicle purchase tax. Tesla is the only fully foreign company to receive the tax exemption in China. The timing couldn’t be more fortunate, as sales in their native USA have been lagging lately, while China’s EV business is undergoing some major changes as the previously very generous government subsidies for New Energy Vehicles are expiring. The new filing, which was released on December 27th, now favours far more stringent environmental and business standards. The new regulation will save customers buying a Model 3 in China around 293,000 RMB, which corresponds to around 37,000 euros.

Tesla is also not the only company benefiting from the regulation, as their suppliers are also happy to cash in on the lucrative Chinese market. It took the US American company only about 19 months to go from signing a memorandum with the local Shanghai government to launching mass production, and finally receiving the fruits of their labours.

Tesla already produces more than 1,000 Model 3 per week in the Gigafactory 3, according to production manager Song Gang. In the “near future”, the plant will even produce 3,000 cars per week, the manager added. General manager Wang Hao further added that demand for the Model 3 in China has been high: “We have a goal of selling every Model 3 that we produce in the Shanghai plant, and we are very confident of achieving that goal.” He declined to mention more exact numbers, however it seems that business is picking up well for the Californian manufacturer.

Timing is excellent, as federal funding for Tesla expired completely in the USA on 1 January 2020. Subsidies for electric vehicles, charging infrastructure and environmentally-friendly technology has been unstable in the USA for some time. While there is a subsidy available, the total amount of vehicles for which it is available is limited to 200,000 – a number which General Motors and Tesla passed some time ago. Initially, the rebate had started at $7,500 before being phased-down to $1,875 after the 200,000 plug-in car cap had been reached. GM will lose their eligibility for the $1,875 tax credit on April 1st, 2020.

In other international news, Tesla has established an offshoot in Israel and plans to open a branch in Tel Aviv in January of this year. The subsidiary was registered last month, but no further information has been made available regarding pricing or market launch. However, we expect to hear more from Israel soon.

Update 05.01.2020: Update on Tesla Model 3 from Chinese production: Tesla has reduced the basic list price for the entry-level version of the Model 3 (Standard Range Plus) from 355,800 to 323,800 Yuan. Taking into account the state subsidy, the base price for the Model 3 in China thus falls just below the psychologically important limit of 300,000 Yuan to 299,050 Yuan, which currently corresponds to around 38,500 euros.

gasgoo.com, reuters.com (Model 3 deliveries China) globaltimes.cn (production), gasgoo.com (sales tax), insideevs.com (USA), globes.co.il, gasgoo.com, reuters.com (both update)