Tesla's updated Model 3 offers extended driving range for Chinese market.

author: FutureCar Staff    

Tesla has introduced a redesigned Model 3 that is made in China and has an extended driving range. This marks the first time the automaker has launched a new model in China before the United States. The new model is being manufactured at Tesla's Shanghai plant and 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. The decision to raise the base price of the Model 3, which is Tesla's top-selling model after the Model Y, could help protect profit margins. However, the price cuts for the higher-end models highlight the ongoing pressure faced by electric vehicle manufacturers, particularly in China where Tesla ignited a price war with local rivals, including industry leader BYD, earlier this year.

The new Model 3 is Tesla's first update to its mass-market car lineup since the launch of its popular Model Y in 2020. Although Tesla has not announced a launch date for the new Model 3 in the U.S., where it currently offers discounts of over $5,000 on some inventory vehicles, the Model 3 is also produced in Fremont, California.

Tesla plans to unveil the latest Model 3 at a trade fair in Beijing on Saturday. Some of the new features, such as a rear display for back-seat passengers, appear to be aimed at Chinese car buyers. The car also boasts a superior acoustic system, a more comfortable interior, additional airbags, and small exterior changes that give it a sleeker front and new headlights.

The new Model 3 also offers a longer driving range, with the standard version having a range of 606 km (377 miles) based on China's testing standards. This represents a 9% increase compared to the previous base model in China. Tesla has already started accepting orders and plans to begin deliveries in China in the fourth quarter. Orders are also being taken in other markets where Tesla exports from Shanghai, including Germany, Japan, Malaysia, Australia, and New Zealand.

Yale Zhang, the managing director at Shanghai-based consultancy Automotive Foresight, predicts that the new Model 3 will perform well outside of China due to less competition in the electric vehicle market. However, he notes that in China, numerous new models with similar or even better features and lower prices have already been introduced since the Shanghai auto show in April.

Last November, it was reported that Tesla was developing an updated Model 3 under the project codename "Highland." The goal of the project was to reduce production costs and enhance the model's appeal. While Tesla did not provide specific details about the new Model 3's battery, sources suggest that it is the same lithium-iron-phosphate battery from CATL used in the base model. The increased driving range is achieved by reducing weight and improving the car's profile 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 stealing the spotlight from German automakers like Volkswagen and Mercedes, who are expected to unveil several new electric vehicles in response to China's rapidly evolving market.

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

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

FutureCar Staff