Tesla announces aggressive Model S pricing for Chinese market

Thu, 23 Jan 2014

Most cars exported to China end up with a hugely inflated price tag – often hovering around twice as much as what we'd expect to pay in the United States. Part of that can be chalked up to duties and taxes – which can be quite prohibitive in the People's Republic – but a big part of it comes down to profitability. Tesla, however, is committed to doing things differently.

While some sources were expecting the Model S to carry a price tag in China more than double that of the US model, Tesla has announced a far lower MSRP for the Chinese market than that. Instead it will sell the Model S for 734,000 yuan – equivalent to $121,000 at today's exchange rates.

Now we know what you might be thinking: that's significantly more than the $69,900 Tesla buyers pay in the United States. And you're right. But you have to take into account several factors. For one, the US price includes a $7,500 federal tax credit. For another, Tesla is including the 85 kWh battery pack as standard in China – an option that would already tack on an extra ten grand Stateside. There's shipping costs to take into account (about $3,600 worth, Tesla figures). And last but not least, there's the considerable taxes the Chinese government rakes in on imported cars: $36,700 of it, to be precise.

Take all those factors into account and you'll soon realize that Tesla is taking a rather aggressive stance towards pricing in the mainland Chinese market. Especially when you consider that it's also developing a new "executive" back seat to suit Chinese buyers who typically like being driven instead of driving themselves. The Model S will reportedly be sold in China under the name "Tesila" – or perhaps "Tuosule" – in two showrooms: one already established in Beijing and another being set up in Shanghai, with a network of Supercharger stations being set up between them.

By Noah Joseph