Less Popular in Europe, Tesla Model 3 Price Drops in China

Excluded from the ecological bonus in France and Germany, the Tesla Model 3 must compensate its sales in China through a pricing adjustment.

Is that the butterfly effect? Or how a small, barely noticeable variation can lead to enormous changes over time. Tesla has not announced losses of the ecological bonus in France or Germany. The American manufacturer also mocks the strike in Sweden rather than listening to the grievances of its employees, whose national labor rights are threatened. Is this strategy of trivialization, by minimizing its impact, the right one?

Competitors are becoming more established each day, with increasingly relevant and affordable options. In China, the phenomenon is pushed to its extreme. So much so that Tesla wants to retreat to the premium segment, but once again, the Chinese production composed of BYD, Geely, Xiaomi, Huawei and their brands are no less prestigious in terms of technological content. But they are still cheaper.

Certainly, the domestic market is huge, and Tesla has already captured a part of it (about 20%), but factories dislike fluctuations in pace. Production is necessary, and thus sales must follow. Especially since the European market, which absorbed part of the production, is drying up.

So, Tesla begins 2024 with a discount of 6000 yuan (about 770 euros) on its Model 3 Propulsion. This reduces the price from 261,400 to 255,400 yuan (32,660 euros). As a reminder, the VAT in China is 13%, compared to 20% in France, which explains part of the price difference (42,990 euros including tax). Transportation to Europe also impacts the European price.

At the same time, the bank credit for purchasing the Model 3 drops to 1.99% when it was 6.25% in France as of January 1, 2024. Believe it or not, over time, this represents significant savings!

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