Tesla lowers Model 3 price in China thanks to LFP cells

Tesla has officially lowered the base price of the Model 3 in China from 271,550 to 249,900 Yuan. The price reduction has likely be achieved by using LFP battery cells from CATL for the first time.

This means that the Model 3 will cost the equivalent of around 31,350 euros in China instead of the previous 34,060 euros, a total reduction of eight per cent. In addition, according to the configurator on the Chinese Tesla homepage, the range of the Model 3 SR+ has been increased to 468 kilometers, according to the locally popular NEDC standard. Although Tesla has not officially confirmed anything, the price reduction and new range make it very likely that the change is due to the new LFP cells.

However, these prices already include the government subsidy of currently 19,800 Yuan. Before the subsidy, Tesla has now priced the Model 3 SR+ in China at 269,700 yuan (around 33,830 euros). This price could also become relevant for European Tesla interested parties in the future: In September, Chinese media and Bloomberg reported that Tesla is considering exporting the Model 3 to Europe from China instead of California. Thus, the cheaper Model 3 SR+ from Shanghai with LFP cells from CATL could replace the SR+ model with Panasonic cells from Gigafactory 1 in Nevada, which is currently offered in this country.

The first reports at the end of July stated that CATL was about to supply Tesla with LFP cells. According to an earlier statement by the raw materials market research company Benchmark Mineral Intelligence, CATL’s LFP cells for Tesla will be prismatic rather than cylindrical, but will be adapted to the Model 3 battery pack.

At the time, Tesla also stated that it would use the LFP cells exclusively in the SR+ model. However, since the price of the long-range model in China has also fallen from 344,050 yuan to 309,900 yuan (43,150 to 38,870 euros), it is possible that this information was not correct. But: the range of the LR version has remained the same despite the new price. Therefore, it is currently considered more likely that an LG-Chem battery is still installed in this version despite the price reduction.

Lithium iron phosphate batteries have the advantage that they are significantly cheaper and more robust than lithium ion cells with NCM or NCA cathode. Although they are somewhat heavier for the same capacity, their energy density is now sufficient for Tesla to equip the smaller models with the cheaper cells. Up to now, the vast majority of the Model 3 cells built in Shanghai have been NMC cells from LG Chem, with Panasonic cells being used for the rest.

reuters.com, electrek.co, teslarati.com, tesla.cn (configurator)