Tesla's upgraded Model 3 offers extended range for Chinese drivers.

author: FutureCar Staff    

Tesla has introduced a redesigned Model 3 made in China, which offers a longer driving range. This marks the first time that Tesla has launched a new model in China before the United States. The new model is being produced at Tesla's Shanghai plant and will 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 the higher-end models highlight the ongoing pressure faced by electric vehicle (EV) manufacturers, particularly in China where Tesla initiated a price war earlier this year.

The new Model 3 represents Tesla's first update to its mass-market car lineup since the launch of the Model Y in 2020. Tesla did not announce a launch date for the new Model 3 in the U.S., but it currently offers discounts of over $5,000 on some of its existing inventory of Model 3 vehicles in the country. The Model 3 is also assembled in Fremont, California.

Tesla plans to unveil the latest Model 3 at a trade fair in Beijing, where it will showcase some new features tailored to Chinese car buyers. These features include a rear display for back-seat passengers, improved acoustics, a more comfortable interior, additional airbags, and small exterior changes that enhance the sedan's appearance.

The new Model 3 also boasts a longer driving range, with the standard version offering a range of 606 km (377 miles) based on China's testing standards. This represents a 9% increase compared to the base model it replaces in China. Tesla is already accepting orders for the new Model 3 and plans to start deliveries in China in the fourth quarter. Orders are also being taken in other markets where Tesla exports from Shanghai.

While the new Model 3 is expected to perform well in markets outside of China, where there is less competition in the EV sector, it may face tougher competition within 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, Reuters reported that Tesla was working on a revamped Model 3 under the project codename "Highland." The goal of the project was to reduce production costs and enhance the model's appeal. Details about the new Model 3's battery were not provided by Tesla, but sources familiar with the features mentioned 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.

In China, the Model 3 faces competition from other EVs such as 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 P7i model. Tesla also plans to showcase the new Model 3 at the Munich auto show, potentially stealing the spotlight from German automakers like Volkswagen and Mercedes, who are expected to unveil a range of new EVs in response to China's rapidly evolving market.

The starting price of the new Model 3 in China is 259,900 yuan ($35,807), while in Germany, it starts at 42,990 euros ($46,670). Deliveries in Europe are set to begin in late October.

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

FutureCar Staff