Tesla announced Friday a 10 percent price cut for the China-built Model 3, allowing the electric sedan to qualify for government incentives. Tesla needed to bring the price under 300,000 yuan to qualify for the government incentive.
Tesla is hoping the move will spur sales in the country. The base price for the Model 3 is now 291,800 yuan ($41,318). The subsidy will bring the price to 271,550 yuan ($38,451). Tesla announced the price change on Weibo.
China extended subsides for EVs in March, hoping to help increase auto sales impacted by the coronavirus pandemic. China’s government last week said the subsidies will be offered through 2022.
Tesla Chief Executive Elon Musk said this week during the company’s Q1 earnings report that the company feels confident it can lower the price and still achieve a good margin.
Model 3s built at Giga Shanghai began deliveries earlier this year and the company is producing thousands a week. Tesla is also expanding the factory in China and is expected to begin production of the Model Y at the facility this year.
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