Ahead of the official launch in China, Tesla is debuting the Model 3 in the country at the 2018 Beijing Auto Show just as they could soon be authorized to produce the vehicle in the market.
As we reported earlier this month, it’s not actually the first Model 3 in the country since private citizens have started importing U.S. Model 3 vehicles in the country – something we don’t recommend.
But it’s the first time that Tesla itself is bringing one in the country.
Automakers are bringing many new electric vehicles at the Auto China 2018 in Beijing – starting with Mercedes-Maybach unveiling an all-electric luxury SUV concept and we are going to report on several others in the next few days.
Tesla is doing its part by bringing the Model 3 to the show, according to pictures of their booth that leaked on Chinese websites ahead of the start of the show tomorrow.
Here are a few pictures of the Tesla booth being set up by Peng Chuan Auto House on Gasgoo:
While Tesla is officially debuting the car in the country, the vehicle is not expected to officially launch in the market until next year.
The vehicle is expected to first be available as a U.S. import, like Model S and Model X vehicles, but Tesla could also soon move to domestic production of the vehicle in order to reduce the price – both logistic costs and also import duties.
Tesla’s vehicles are currently slapped with a 25% import duties, which is limiting the company’s demand in what is now the biggest automotive market in the world, but Tesla has nonetheless been able to grow significantly in the country.
The California-based automaker has doubled its sales to over $2 billion in China last year and they by far lead foreign electric car sales in the country.
In order to keep growing, it looked like Tesla needs to have domestic mass production of the cheaper Model 3 electric car, but the company seemed reticent to establish local manufacturing capacity due to the requirement of having to partner with a Chinese firm.
But now that China is officially lifting the requirement for electric vehicles this year, Tesla is expected to soon announce plans for local production.
I’m curious about the timing of the launch of the Model 3 in China versus the timeline for Tesla to establish local production.
I anticipate that Tesla will have an extremely aggressive timeline for a start of production in China considering they have been working on establishing manufacturing capacity in the country for years now and apparently they were only waiting for the opportunity to be able to own the entire factory.
With this said, I believe that they will still start with U.S. imports since there are many Chinese reservation holders who have already been waiting for the car for years now.
Also, if Tesla is bringing the vehicle to the auto show right now, it’s generally to drum up some demand and I doubt that they will wait another 2+ years to capitalize on it.
What do you think? Let us know in the comment section below.