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Price And Local Chinese Manufacture To Be The String Points As China EV Makers Take On Tesla's Model 3


04/19/2017


Price And Local Chinese Manufacture To Be The String Points As China EV Makers Take On Tesla's Model 3
In order to go head-to-head against Tesla Inc's "mass market" Model 3 sedan, Chinese-funded, smart, connected plug-in car start-ups are scrambling to launch cars even though it's not due to arrive in China until next year.
 
The key is that they will produce their cars locally, making them better able to match the Model 3's price for leading Chinese electric vehicle (EV) start-ups such as Future Mobility, WM Motor and Singulato Motors.
 
Tesla is expected to price its Model 3 from $35,000 in the United States as the company has largely enjoyed a monopoly in the premium electric car market. A 25 percent to that price is expected to be added in import tariffs for buyers in China.
 
Model 3 is the car to beat, acknowledge the founders and CEOs of Future Mobility, WM Motor and Singulato.
 
They said that around 300,000 yuan (roughly $43,500) or below will be the expected price that the first vehicles they aim to launch in the next couple of years.
 
"Between 200,000 yuan and 300,000 yuan," said Singulato's co-founder and CEO Shen Haiyin.
 
By making their cars more premium and yet cheaper than Tesla's mass-market all-electric battery car, the Chinese-funded firms' strategy is to beat the Model 3 in China.
 
The inability of Tesla to produce cars in China, the world's leading market for plug-in cars, is seen as a weakness of the California-based company by the three Chinese start-ups.
 
Rumors about it manufacturing its cars locally have been denied by Tesla. "Tesla is deeply committed to the Chinese market, however these rumors are not true," the company said.
 
But it is also a fact that it would not be easy to compete with Tesla. The investors like CEO Elon Musk's strategy of offering stylish, high performance cars that are continually upgraded with features that rival automakers are still only testing and this resulted in the company surpassing Ford Motor Co in market value this month.
 
premium price classes at relatively low volumes has been the only category that Tesla has to date competed in. and to reach its projected annual sales of 500,000 vehicles, the Model 3 will need to appeal to more price-sensitive consumers.
 
his company plans to launch three models, says Daniel Kirchert, president and co-founder of Future Mobility. A sedan and a 7-seater multi-purpose vehicle (MPV) will follow a premium midsize crossover sport-utility vehicle (SUV), will arrive "before 2020", its first launch.
 
Kirchert said that "to achieve this very attractive entry price of about 300,000 yuan,", all will be based on the same vehicle underpinning architecture and share major components.
 
"It's a bit more than $40,000, a very competitive price positioning ... because Tesla customers buying the Model 3 in China would have to shoulder the cost of a 25 percent import tariff on the car", unless it's produced in China, he said.
 
"We will be competitive because we produce the car locally," he added.
 
Future Mobility plans to make the SUV bigger than the Model 3 and more luxurious in addition to making its car in China, at a planned assembly plant in Nanjing, Kirchert said.
 
"In the end, it's really about how premium you are. That's the real challenge."
 
Singulato Motors said that its crossover SUV priced below 300,000 yuan as it unveiled its first "mass-production" car in Beijing last week.
 
Co-founder Freeman Shen of WM Motor said that in the second half of 2018, the company plans to launch its first car, an electric plug-in crossover SUV which will also be priced to compete with the Model 3.

(source:www.reuters.com)