Chinese EV Startups Want To Beat Tesla Model 3 On Price

Chinese startups are waiting anxiously for the Tesla Model 3 to open up a mass market for mid-priced EVs next year so they can use a home court advantage to jump in on the action.

Domestic companies like Future Mobility, WM Motor, and Singulato Motors, are working hard to be ready for Tesla’s first “volume” EV. The U.S.-built car will be penalized by China’s trade policies and locals also stand to undercut Tesla’s already slim-to-none profit margins it earns doing business in California.

The Model 3 will reportedly start in the U.S. at $35,000. Buyers in China will need to add 25 percent to Tesla’s base price in import tariffs which the local companies will be blissfully exempt from paying, in addition to component and labor cost advantages they also may enjoy.

All three Chinese electric vehicle makers are getting ready to launch vehicles in the next two years priced at 300,000 yuan (about $43,500) or below. Executives at the startup automakers revealed more with Reuters right before the Shanghai auto show, which opens to the public on Friday.

“Between 200,000 yuan and 300,000 yuan,” said Singulato’s co-founder and CEO Shen Haiyin. That would come out to about $28,962 to $43,500 in U.S. dollars.

Singulato Motors plans to go beat the Model 3 by going more premium and cheaper.

The company is also selling the latest in vehicle technologies with automated driving functions, an active “smart” safety system, and software and hardware designed to provide “depth learning and self-growth,” according to the company website.

As the photo above shows, the vehicle has been designed as a futuristic crossover with vast windows and something similar to the Model X’s falcon-wing doors.

Model 3 prototype.

Singulato showed its first first “mass-production” crossover in Beijing last week, for which it’s taking pre-orders. The startup said it will be priced below 300,000 yuan (about $28,962).

The next three years are the timeframe for these startups to bring product to market.

WM Motor will go after the Model 3 by launching its first vehicle, an electric crossover SUV, in the second half of 2018. It will be the first of three EVs launched by 2020 competitively priced against the Model 3.

Future Mobility will be launching three models with the first model being a premium midsize crossover sport-utility vehicle (SUV), that will arrive before 2020. Within three years of the first launch, it will be followed by a sedan and a seven-seater multi-purpose vehicle (MPV).

Manufacturing cars in China, which would likely be through a government-backed joint venture, would shave off that import tax. Tesla has denied that it was considering manufacturing its cars locally through a recent talk with the Chinese government.

“Tesla is deeply committed to the Chinese market, however these rumors are not true,” the company said.

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China’s official news agency Xinhua recently posted a tweet with a photo of Tesla CEO Elon Musk meeting Chinese vice premier Wang Yang.

It’s the first time Wang has ever met an automaker CEO alone, according to Li Anding, a former automotive reporter for China’s Xinhua news service who now consults with automakers on doing business in China.

Tesla has done well selling its premium Model S and Model X in China, with the Model 3 representing a new channel for Tesla to pursue in China and elsewhere.

With the company ramping up from under 100,000 units produced last year to 500,000 next year, China should be an important market. The Model 3 will allow the company to reach more price-sensitive consumers in China.

Reuters

 


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