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Tesla Is Seizing China’s EV Scene
Tesla Is Seizing China’s EV Scene
Electric parking. Image by Stan Petersen from Pixabay
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EqualOcean EqualOcean

Tesla is starting a massive marketing campaign in China. After building the Gigafactory 3 (the plant belongs to the wholly-owned Tesla's subsidiary, comprising the whole production cycle) in Shanghai, the leading global car maker aims at the broader consumer groups by offering car loans with 0% interest rate.

Previously, the company announced that the starting price of Tesla Model 3 assembled in the Shanghai plant will amount to CNY 328,000 (USD 47,500). The new factory will have enough capacity to produce 500,000 vehicles per year in a short term. This number is close to the amount of battery electric vehicles sold a year ago in China — 579,000.

As web tech portal Liangziwei (量子位) reported with reference to the Tesla's official Weibo account, the global EV pioneer is taking the market penetration issue seriously this time: interest-free car loans will be provided for all Chinese citizens, while the credit period duration varies from 1 to 5 years depending on the province issuing the license plate for a particular car.

In a nutshell, the new car loan regime for Beijing looks as follows: on the date of a purchase, a Model 3 buyer is charged CNY 120,000 (USD 17,400), this amount is considered as cash deposit that will be paid back once the final payment against credit is made; As for the regular payments, the customer has to transfer CNY 11,700 (USD 1,700) every month over the three years of contract.

Although direct labor cost is supposed to be significantly lower in China, the company might still encounter deep short-term losses in the new market. A few days ago, He Xiaopeng, founder and chairman of Xpeng Motors, publicly expressed doubts about local competitiveness of Tesla Model 3.  However, American EV giant seems to have a bigger leverage than all the local competitors. It can always resort to dumping, relying on brand and other market advantages.

China holds a 56% market share in the global electric-vehicle market with more than 1 million units sold in 2018. There is how and why the new sector has been growing in the country.

Enterprise Information

EqualOcean is a leading industry tech media and an investment research company.
CATEGORIES: AI, Research
Last Funding Type
Series C
Number of Employees
200
Number of Funding Rounds
5
Total Funding Amount
26.79M

Enterprise Information

EqualOcean
EqualOcean is a leading industry tech media and an investment research company.
CATEGORIES: AI, Research
Last Funding Type
Series C
Number of Employees
200
Number of Funding Rounds
5
Total Funding Amount
26.79M

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EqualOcean is a leading industrial tech media and investment research company that focuses on technological and industrial innovation in China.

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