Tesla's updated Model 3 offers improved range for Chinese drivers.

author: FutureCar Staff    

Tesla has introduced a restyled Model 3 made in China, with a longer driving range. This marks the first time that 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 will also be exported to other markets in Asia, Europe, and the Middle East. However, the starting price of the new model is 12% higher than the previous base model in China.

At the same time, 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 raising the base price of the Model 3 could help protect margins, the price cuts for its higher-end models highlight the ongoing pressure faced by electric vehicle manufacturers, particularly in China where Tesla ignited a price war with local rivals earlier this year.

The new Model 3 represents Tesla's first update to its mass-market car lineup since the successful launch of the Model Y in 2020. However, the company has not announced a launch date for the new Model 3 in the U.S. market, where it currently offers significant discounts on some inventory vehicles. The Model 3 is also assembled in Fremont, California.

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

In terms of driving range, the new Model 3 offers a standard version with a range of 606 km (377 miles) based on China's testing standards, which is approximately 9% higher than the previous base model in China. Tesla has already started taking orders for the new Model 3 and plans to begin deliveries in China in the fourth quarter. Orders are also being accepted in other export markets, including Germany, Japan, Malaysia, Australia, and New Zealand.

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

Last November, Reuters reported that Tesla was developing a revamped Model 3 under the project codename "Highland." The aim of the project was to reduce production costs and enhance the model's appeal. Although Tesla has not provided specific details about the new Model 3's battery, insiders reveal that it utilizes 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 profile to minimize wind resistance.

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

The new Model 3 has a starting price of 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