Business Intelligence on Retailing, Franchising, and Consumerism in China

Tesla Announces Model S Retail Price In China

News about U.S.-based electric vehicle designer and maker Tesla and its China plans have been coming in fast the past few months as the company revs up for China growth.

The company announced the retail price of its Model S for the Chinese market, which starts from CNY734,000 for a 85kWh electric car.

Tesla said on its official blog that it requires a lot of courage for Tesla to make such a pricing strategy. They hope to treat the Chinese consumers fairly. If they were following the automotive industry practice in China, Tesla can set the price of Model S over twice as that in America. However, the company decided not to follow the discriminatory practice.

Tesla said the pricing of Model S in China is much lower than its competitors; and the reason is that Tesla wants to treat Chinese customers as those in other countries and regions. It means that the price of Model S in China is the same as that in America, but tariffs, transportation costs and other taxes are inevitable.

Tesla added that they did not even take exchange rate fluctuation and the costs of building charging stations in China into consideration.

Basing on the calculations of Tesla, the CNY734,000 includes USD81,070 for the car, which is the price in America; USD3,600 for transportation, loading and unloading expenses; USD19,000 for tariffs and other taxes; USD17,700 for value-added tax. This means the tariffs and taxes account for about 30% of the price.

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