Tesla drops China-made Model 3 price by up to 10% as it introduces cheaper batteries
Tesla
Tesla cut prices for its Chinese-market Model 3 sedans by up to 10%, as reported by Reuters.
The company will outfit future standard-range Chinese-made Model 3s with cheaper, cobalt-free battery packs, anonymous sources told Reuters recently.
Tesla did not confirm which batteries the standard-range car with the updated price currently uses.
The basic Model 3 now costs $249,900 yuan in China, around $36,800 at current exchange rates.
Tesla cut the price of its Chinese-market Model 3 sedans by up to 10%, according to pricing listed on the company's China website. The move came the same week that sources told Reuters Tesla would move to a cheaper battery in certain Chinese-made Model 3s, but it wasn't clear whether that caused the price drop.
A Shanghai-made Model 3 with standard driving range will now run you 249,900 yuan — roughly $36,800 at current exchange rates — after government subsidies. The base cars previously cost 271,550 yuan, or about $39,990, Reuters reported.
The longer-range models also got price cuts, Reuters added. After subsidies, the long-range model now retails for 309,900 yuan, around $45,640 at current exchange rates. That's down from 344,050 yuan, or approximately $50,670.
The price drops came not long after Reuters, citing unnamed sources, reported that the EV maker would outfit standard-range cars made in China with a new, cheaper battery pack. It wasn't clear at the time of the report whether the cheaper battery would lower the cost of the Model 3, and Reuters said after the price drop that Tesla "did not disclose what batteries the cheaper version uses."
Still, Reuters reported Wednesday that the new battery units would be lithium-iron-phosphate batteries, which are cheaper than the nickel-manganese-cobalt units the carmaker used previously. The new batteries would also be cobalt-free.
Cobalt is one of the priciest metals used in EV-battery manufacturing, and its production is rife with problems. More than half of the world's cobalt supply comes from the Democratic Republic of Congo, where its production includes human-rights violations such as child mining labor.
Elon Musk has expressed plans to reduce Tesla's reliance on the controversial material, tweeting in 2018 that the company's next-generation batteries will "use none."
Telsa did not immediately respond to Business Insider's request for comment.
Read the full Reuters story here.
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