Tesla's Enhanced Model 3 Provides Extended Range in Chinese Market

author: FutureCar Staff    

Tesla has introduced a redesigned Model 3 made in China, featuring a longer driving range. This marks the first time the automaker has launched a new model in China before the United States. The new model, which is being manufactured at Tesla's Shanghai plant, comes with a starting price that is 12% higher than the previous base model in China. It will also be exported to other markets in Asia, Europe, and the Middle East.

Simultaneously, Tesla has reduced the prices of its premium Model S and Model X by approximately 14% to 21% in China and the U.S., its two largest markets. While increasing the base price of the Model 3 could help protect margins, the price cuts for the higher-end models highlight the ongoing pressure faced by EV manufacturers, particularly in China where Tesla ignited a price war with Chinese rivals, including industry leader BYD, earlier this year.

The latest Model 3 from Tesla represents the company's first update to its mass-market car lineup since the launch of the popular Model Y in 2020. Although Tesla has not announced a launch date for the new Model 3 in the U.S., the vehicle is currently available at discounted prices of over $5,000 for certain inventory units. The Model 3 is also produced in Fremont, California.

Tesla plans to unveil the new Model 3 at a trade fair in Beijing, showcasing its new features tailored to Chinese car buyers. These features include a rear display for back-seat passengers, improved acoustic system, more comfortable interior, and additional airbags. The exterior images reveal minor changes that give the sedan a sleeker front and new headlights.

In addition to aesthetic updates, the new Model 3 promises an extended driving range. The standard version has a range of 606 km (377 miles) based on China's testing standards, which is approximately 9% higher than the base model it replaces in China. Tesla is now accepting orders and plans to commence deliveries in China during the fourth quarter. Orders are also being taken in other markets where Tesla exports from Shanghai, including Germany, Japan, Malaysia, Australia, and New Zealand.

While the new Model 3 is expected to perform well outside of China due to the lower competition in the EV market, industry experts anticipate challenges within China. Yale Zhang, the managing director at Shanghai-based consultancy Automotive Foresight, explains that numerous new models with similar or even better features and lower prices have already been introduced in China since the Shanghai auto show in April.

Reuters previously reported that Tesla was working on a revamped Model 3 under the project codename "Highland." The project aimed to reduce production costs and enhance the model's appeal. Although Tesla did not provide specific details about the new Model 3's battery, sources familiar with the features stated that it uses the same lithium-iron-phosphate battery from CATL for the base model. The increased driving range is achieved by reducing weight and improving the car's aerodynamics to minimize wind resistance.

In China, the Model 3 faces competition from BYD's Seal, Geely's Zeekr 001, Nio's ET5, and Xpeng's P7i. Xpeng recently announced zero-interest loans and free upgrades for its car. Tesla plans to showcase the new model at the Munich auto show, potentially overshadowing German automakers like Volkswagen and Mercedes, who are expected to announce a range of new EVs in response to China's rapidly changing market.

The new Model 3 starts at 259,900 yuan ($35,807) in China and 42,990 euros ($46,670) in Germany. European deliveries are scheduled to begin in late October.

($1 = 7.2582 Chinese yuan, $1 = 0.9211 euros)

FutureCar Staff