A Fair Price

A Fair Price

So Tesla has just announced on their blog how much the Model S will cost in China. As usual for Tesla, it is the same as everywhere else plus local duties, taxes, shipping. Should be interesting to see how people react.

AmpedUP | January 22, 2014

I like it. An honest approach.

logicalthinker | January 22, 2014

With China enjoying 'most favored nation' trading status with the USA, and paying next-to-nothing to hawk its goods here, it ought to be getting a lot of pressure to return the favor instead of charging such high taxes on goods from the USA.

2k13MS | January 22, 2014

Well played Tesla. Very well played.

Benz | January 23, 2014

This is a good decision in the light of: "Accelerate the Advent of Sustainable Transport".

jordanrichard | January 23, 2014

"We're not even factoring in the cost of the free-to-use Supercharger network that Tesla will build across China." So, really China is getting the car for at least $2K less than what we are paying. Correct me if I am wrong.

Car t man | January 23, 2014

They will probably charge extra for that then..

lolachampcar | January 23, 2014

Is Tesla doing a SC network in China????? That would seem to be something the Gov should be doing.

PaceyWhitter | January 23, 2014

I bet they will still charge the $2000 but say it is for the equipment rather than the use of the network.

drax7 | January 23, 2014

At this favorable price they will blow away the luxury competition, only issue now is production. This should
Cause a riot, maybe even a food riot.

Benz | January 23, 2014

"the price of the Model S with the premium 85 kWh battery pack is 734k CNY."

Supercharger capability comes standard with the 85 kWh battery pack, right?

So, why would they charge extra for the use of the Supercharger network in China?

Mathew98 | January 23, 2014

Super charging hardware is standard in all MS trims. The cost for the hardware is built into S85/P/P+ pricing but it's a $2K option for the S60.

TM will not need to charge the extra $2K for super charging. I'm assuming these wealthy owners in China will opt for the higher batter/performance models.

Benz | January 23, 2014

Does that mean that the Tesla Model S with a 60 kWh battery pack is not being offered in China? That would be interesting.

Car t man | January 23, 2014

I don't just assume that the entire model is completely identical in China. It may be that Tesla fears long permission times, etc. I don't know anything about SC plans in China existing... China is huge, fragmented,... so they
probably will cover major cities but may charge extra for that.


gov won't cover someone's private standard. If gov covers something, it is some standard, like Chademo or Mennekes, agreed by multiple players. They
will probably commit to normal quick chargers, with an universal plug.

carlk | January 23, 2014

Does that mean there will not be significant import taxes?

eddiemoy | January 23, 2014

wow! tesla going to kill the competition!!! undercut everyone else by 50%.

wow! wow! wow!

Mathew98 | January 23, 2014

Earlier estimates for the MS to be about $200K in China. Now it is official that it will be 40% lower than the earliest figure.

Imagine what the demands for an exotic EV would be in comparison to other vehicles in the class.

If MS can out sell Audi/MB/BMW in the US with similar pricing, imagine how much more MS would be sold at a 40% - 50% cost advantage in China!

Galve2000 | January 23, 2014

Doesn't the Chinese government charge a 100% markup on luxury goods? I hope Tesla doesn't put its foot in its mouth, or end up selling the Model S in China at a loss.

Mathew98 | January 23, 2014

@Galve2000 - Apparently the Chinese gov't will charge extra by the engine displacement. Since MS doesn't have an ICE engine, it was only hit with a 25% tariff of the base price.

Jolinar | January 23, 2014

+1 @Benz

I didn't find 60kWh option in Chinese design studio...


SuperCharging is build into the price of 85kWh and since Chinese won't be able to opt for 60kWh, they will have ALL cars capable of SuperCharging :-)

Haeze | January 23, 2014

With the rumours of China putting some serious tax incentives on EVs in the near future, this could be Norway Part II !

jandkw | January 23, 2014

Very good price to sell $121,000 for S85 in China, Wall Street Journal reports that the base price of $81K + $40K (incl. $3,600 for shipping and handling, $19,000 for customs duties and taxes and $17,700 for value-added tax to its comparable U.S. price). This compares to BMW X5 xDrive for example, $56K sticker in US vs $153K in China along with Mercedes and other premium brands who charges 2-3X in China. Good job, Tesla.

JZ13 | January 23, 2014

I think it's safe to say we can increase our future sales projections for the model S/X.

Benz | January 23, 2014


That's right. I should have waited a few more days before posting them. I will have to reconsider them.

Jamon | January 23, 2014

+1 JZ13. TM will be supply constrained into the foreseeable future.

We're gonna need more giga-factories!! | January 23, 2014

Tesla just keep looking better & better...very nice

Car t man | January 23, 2014

This is great news. Maybe too good. Affluent Chinese might find it too cheap now but higher middle class might pick it right up!

archibaldcrane | January 23, 2014

Anyone know what a comparably priced car in China would be (after taxes and tariffs?) Is it like a 5-series? A 3-series?

Mathew98 | January 23, 2014

7 Series or S Class would be more appropriate comparison.

archibaldcrane | January 23, 2014

A 7 series or S Class in China costs significantly more than this newly announced price for the Model S.

I'm looking for prices of cars in China that are similar to the price of the Model S in China.

archibaldcrane | January 23, 2014

734k Chinese Yen is a little more than a 535i - - although I don't know if that price is before or after taxes/tariffs.

A little more than an E300 as well:

carlk | January 23, 2014

The only remaining issue is Tesla needs to drastically increase the supply. Otherwise it may just create a black market in China thus defeat the purpose.

Mathew98 | January 23, 2014

@archibaldcrane - You might as well compare between a watermelon and a grape fruit.

These cars are not even in the same class, size, or segment as the Model S. If you are comparing base solely on price then you're missing the point of comparing similar vehicles.

DallasTXModelS | January 23, 2014

Yes it was the same way with Canada pricing. It was amazing how many Canadians cried foul that they had to pay more than the US. When the reason for the additional was totally there due to their government.

tes-s | January 23, 2014

I like the approach - no pricing nonsense. Everyday low pricing for everyone.

Mathew98 | January 23, 2014

I wouldn't associate MS with everyday low price. It is not a low cost vehicle by any means.

But TM is trying to do what's right without gouging any particular market. It is just a refreshing company to do things radically different than the old guards.

archibaldcrane | January 23, 2014

Matthew, you are completely missing the point. I want to know, at the Model Ss price point, in China, what other cars would be in range.

I get that you are super up Tesla's ass at the moment so you probably can't see your computer screen, but vehicle size / class is not the point of this inquiry. We did the same thing here comparing the Model S price in Norway after taxes to other cars to see how much further your dollar went relative to buying in the US.

It's not a comparison of "similar" vehicles, it's a comparison between similarly priced vehicles.

Benz | January 24, 2014

OK guys, let's keep it decent here.

To clarify your point I would like to show you a quote from Brian H:

"We have ample evidence that MS is also bought by those not otherwise in the premium market, so it has a much wider base than its "competitors". It will not only eat into their markets, it will eat around and under them. >:)"

And here is my reaction to his quote:

I think that Brian has hit it on the nail, he is absolutely right about that. And that makes the pool of customers for the Tesla Model S (and for the Tesla Model X as well) even bigger. Customers who were looking to buy a car from the F-segment will obiously consider the Tesla Model S as an option, but customers who were looking to buy a car from the E-segment will consider the Tesla Model S as an option as well. Just because it's a very good value propesition. People want value for their money. We all want that.

Another question came to my mind: "Will Tesla Motors ever be demand constrained"? Yes, they will someday be demand constrained, but heck that will not happen in this decade!!!

That means that Tesla Motors do have a problem. Which is that they will not be able to catch up with demand in the coming years. They will have to invest a lot of money in the expansion of production capacity. Much more than the $415M which they have already planned to invest in 2014. They are going to have to do that every year. And each time the investment will be higher than the one in the year before.

What about battery cell supply? Well, that new agreement with Panasonic for those 1.8B 18650 battery cells is certainly not going to be enough. They will need many more of those 18650 battery cells in the coming years. As far as I can remember, this has already been mentioned by Elon Musk during the Conference Call of the Q3 2013 Earnings Report in November 2013.

The Conference Call of the Q4 2013 Earnings Report in February 2014 will be very very very interesting to listen to. That Gigafactory is going to be of major importance for the future development of Tesla Motors. I think that they will need to have to have it operational somewhere in Q3 2015.

They will have to simultaneously keep on opening more stores, service centers and Supercharger stations. That is of critical importance to keep the demand growing.

In this decade I see lots of earnings and lots of investments for Tesla Motors. This whole story is getting more and more interesting as time goes by.

My predictions for the deliveries in the coming years are:

2014: S = 44,000+ and X = 400+
2015: S + X = 100,000+
2016: S + X = 200,000+
2017: S + X + E = 400,000+
2018: S + X + E = 800,000+

The future is bright.

Car t man | January 24, 2014

I'm not sure many here realize that Tesla may actually have priced itself out of the luxury segment. Indeed landing in the middle class section which is huge, but Tesla may want to consider special plush variations for two or three
times the price. Have those who really want to spend three or four times as much also finance the next round of advances as the exuberantly flush early adopters. In China, those will see this as an el cheapo car.

If the middle class does go for the Tesla though, numbers will be huge.
But charging will be a problem for many or most.

Benz | January 24, 2014

The rapid expansion in the development of charging infrastructure is going to be critical indeed.

SamO | January 24, 2014

Tesla's biggest problem is going to be keeping up with the Supercharging installations in China. As posted elsewhere, China will need 200-400 installed soon if Tesla is going to sell equal to U.S. rate by 2015 (per Elon Musk on CNBC)

Mathew98 | January 24, 2014

@archibaldcrane - Oh thank you for acknowledging. I am stuffed with TSLA generates profits up my rear end. It keeps me quite warm and toasty during the recent arctic blasts.

I'm quite happy to have convinced myself to load up in the last few weeks before the latest rounds of positive news.

Thank you, may I have another?

petero | January 24, 2014

China is in a unique position to ‘quickly’ change the ICE-ZEV debate. Can you imagine the impact on luxury Big ICE (MB, BMW, Audi, Porsche, Jaguar, etc.) if China waived all duties and taxes on ZEVs?

Cindy I II III | January 24, 2014

Tesla called this pricing a risk. My understanding of the risk is that the satisfaction of owning a car others simply cannot afford will be missing. In the 80s when the market first opened up, a pair of jeans not sold for ¥20 was sold when the price was raised to ¥200. There's a cultural difference in China/Taiwan that made the region consume the majority of luxury vehicles despite of much higher prices. And Tesla has decided not to deviate based on the cultural difference there. Theoretically, one can make up for the lower margin with higher volume, but interesting to see a company with production constraints to adopt this approach.

For those Chinese who ordered Tesla MS sight unseen, price unknown, I would love to hear/read what they/you think and have to say.

Actually, I'm going to ask my college who told me how excited her circle in Beijing was for Tesla last summer...

Benz | January 24, 2014

@ petero

That would be a game changing decision.

@ Cindy123

Keep us updated.

Brian H | January 27, 2014

Note he said 60s would also go in there, but somewhat later.

amitb00 | January 27, 2014

I agree with Brian H comment that Tesla is able to attract folks who normally will not spend do much on a car. I am one of those.