Model 3: Tesla Makes a Major Decision in China

The declining sales of the Tesla Model 3 in Europe are forcing the American manufacturer to revise its market prioritization policy.

For months, Tesla’s sales in China have been slowing down. Its priority was elsewhere: Europe. It was urgently necessary to produce and ship thousands of Model 3 vehicles across the Old Continent. An important factor to consider was: a boat takes an average of 27 days to travel from Shanghai to Rotterdam in the Netherlands!

As a result, Chinese customers were not prioritized in sales, especially since the selling price of a Model 3 in China is lower than in Europe (261,400 Yuans, or 33,200 euros with a 13% VAT, versus 42,990 euros in France). Over there, the competition in the electric vehicle market is fierce, with BYD crushing the competition. Its weekly sales are 3.5 times higher than Tesla’s. About 62,000 cars versus 18,000 for the American company. Tesla is criticized for being too expensive and no longer having a technological edge. This has already been evidenced in numerous articles on Mobiwisy.

However, December was disastrous for the Model 3 in Europe. One after the other, Germany and France stopped offering it an eco bonus. In Germany, the electric vehicle subsidy principle itself was eliminated. In France, it was simply cut based on production location eligibility. That’s why a Tesla Model Y produced in Germany retained its 5,000-euro bonus.

Since then, Tesla has decided to reallocate part of the Model 3 production to the Chinese domestic market. Weekly sales have rebounded while delivery times have decreased. Moreover, Tesla offered a discount of 8,000 yuan (about 1,000 euros) for any purchase made before December 31, 2023. This had a positive impact on results.

Amid the strike in Sweden, the loss of two major markets—the France and Germany—has darkened the outlook for Tesla in Europe recently.

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