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Price reduction at Tesla: Tesla: Model 3 is cheaper and continues | message


• New batteries make lower prices possible
• Demand in China below expectations
• Model 3 could also be cheaper in other countries

The US automaker Tesla has launched a slightly modified Model 3 in China. The e-cars from the Gigafactory in Shanghai will not only be available at a lower price, the range of the Model 3 will also be increased at the same time.

Cheaper batteries with longer range

It is assumed that Tesla will use LFP-based battery cells for the new version of the Model 3. These are supplied by the battery manufacturer CATL, with whom Tesla entered into negotiations in early 2020. This assumption has since been officially confirmed by Tesla.

As Tesla announced in the press release, the Model 3 now uses lithium iron phosphate instead of the usual lithium-ion batteries. According to Tesla, these now have a range of 468 kilometers.

LFP-based batteries do not contain cobalt, which is usually the most expensive material in battery production. Although their weight is higher, the energy density is now sufficient for smaller models such as the Model 3. In China, Tesla has so far used almost exclusively the more expensive NMC cells from LG Chem, as reported by

Significant price reduction for Model 3

As Tesla announced at the beginning of October 2020, the Model 3 produced in China with a standard range will cost around 31,400 euros after subsidies, after the previous 36,600 euros. The Model 3 with long-distance rear-wheel drive should also be available in China at a price of around 38,900 euros. With the previous battery, the price for this model was around 43,200 euros.

While the cheapest Model 3 in the USA costs the equivalent of around 34,000 euros and it is not available in Germany for less than 42,900 euros, prices in China are the lowest in the world. As early as March 2020, it was suspected that Tesla could take this step. At that time, a price of around 28,000 euros was even considered possible, as the site wrote.

Will the Model 3 also be cheaper in Europe?

Contrary to previous statements, Tesla could also deliver its vehicles produced in Shanghai to other parts of the world, according to the Bloomberg news agency. Tesla boss wrote in early 2019 Elon Musk about Twitter that the Model 3 and Model Y will be built for the “larger Chinese market”.

Presumably, the production of vehicles for the world market will start in Shanghai from the fourth quarter. Accordingly, the vehicles could not only be delivered to Asia, but also to Australia, New Zealand and Europe.

One reason for this decision could be that demand in China is lagging behind the production capacity. In addition, with this decision Tesla could reduce prices in, for example, Australia or Europe. In Australia, the standard version of the Model 3 currently costs around 45,500 euros. As the Australian news website The Driven estimates, the Model 3 produced in Shanghai could come on the market in Australia for around 35,100 euros.

Felix Spies / editors

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Image Sources: Nadezda Murmakova /, Josh Edelson / AFP / Getty Images

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