Tesla cuts prices in China ahead of the lower import duties

As we reported yesterday, Tesla is preparing a massive push in China as import duties fall and local manufacturing is coming.

Now Tesla is already lowering its price by 40,000 yuan to 90,000 yuan (~$6,000 to ~$14,000 USD) depending on the model.

The 25% import duties that Tesla vehicles are subject to in China are going down to 15% starting in July, but Tesla says that they already adjusting their price structure.

Unsurprisingly, Tesla’s most expensive vehicles are seeing the biggest price reduction.

The Model X P100D gets a 90,000 yuan (~$14,000 USD) price cut.

With this said, the performance version of the all-electric SUV still cost 1.3 million yuan (~$204,000 USD) or about $60,000 more than it does in the US.

The import duties have significantly increased the price of vehicles in China, especially luxury vehicles, which make up an important part of the imported vehicles, but several automakers have also added wider margins on top of the import duties.

The timing is a bummer since there's apparently a huge shipment of ~1,200 Tesla vehicles that just arrived in China before the reduction in import duties. That's up to $12 million in potential consumer savings that went to taxes instead. https://t.co/UPVAdjKEL1

— Fred Lambert (@FredericLambert) May 23, 2018

Tesla has long been claiming an international pricing structure that results in all vehicles costing the same everywhere after the exchange rate, import duties, and local taxes.

The company sees this as an advantage that it can implement since it operates all its store itself without going through third-party dealers who can enforce their own prices.

It has not always been the case, but it most often could be attributed to Tesla being slow to adjust pricing following exchange rate swings or policy changes.

In China, Tesla has been doing fairly well despite the 25% import duties.

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.

Now the price reduction should help them maintain demand until they can establish local production to take advantages of more EV incentives and lower their prices even more.

An announcement about a Tesla factory in China is expected soon now that the automaker has set up a new company in Shanghai’s Free-Trade Zone.

Featured Image: Tesla gets Guinness World Record for a massive Model S and X parade in China