Let me put it this way, Tesla can easily lower the starting price of Model Y in the Chinese market to RMB 260,000 without compressing profit margins.
Why is this? Take a look at the figure below.
The cheapest versions of Model Y in China and the US suddenly become different
Before about 9 am Beijing time on January 8, 2021, the versions of Model Y in China and the US were indeed the same. However, after 9 o’clock, a disappeared model version—the standard range rear-wheel drive version of Model Y appeared on the North American Tesla official website configurator.
Do you still remember Elon Musk’s reply to a netizen on Twitter in July 2020?
Model Y SR was dead between 2020.7.13 to 2021.1.8, and now it’s walking dead.
Netizen: The standard range rear-wheel drive version of Model Y disappeared from the configurator, can this car still be purchased?
Elon: No, the range of this car is unacceptably short (less than 250 miles under EPA cycle).
The standard range rear-wheel drive version of Model Y newly listed in North America, without considering any tax differences and other factors for businesses, its directly converted RMB price is shown below:
(Chart: Jenwayz)
Although the subsidy will continue to decline this year, if it is launched within this year, the subsidy of more than 10,000 RMB is still guaranteed. Then, the starting price of the Chinese version of Model Y can be reduced to RMB 260,000, it’s not just a dream!
Is there any room for price reduction other than profit margins? Do you still remember what I mentioned in “How to view the starting price of the Tesla domestic Model Y of RMB 339,000”? “Model Y can be priced as low as Model 3, which means it can be priced even lower.”To go further, the low-price attack launched by Tesla in the Chinese market with Model 3 was actually just a rehearsal of its trump cards in the global market. With its advanced pure electric vehicle cost control and the asymmetrical advantage brought by rapid investment dilution through early production, it will quickly reduce prices after other manufacturers bring competitive products.
Here is the historical price change record of the Model 3 for the Chinese market produced by Garage 42. Check it from time to time to maintain a clear understanding of the prospects of the pure electric vehicle market:
By the way, at the beginning of 2021, why did Tesla release the rear-wheel drive version of the Model Y in North America? In my opinion, “the reason why it was sold at a high price before was that there was no competitor.” I think this is because this car, shown below, began delivery in the North American market in early January this year.
Image source: Detroit News
Oops, that’s the modified race version (scratched out), it’s the one below.
Image source: Detroit News
As the first work of Tesla’s first almost non-obvious competitor in North America, the Ford Mustang Mach-E, which can achieve a range of 300 miles under the EPA cycle, should be able to say.
There are many optional configurations available for the Mach-E in the Premium version, and only the all-wheel drive long-endurance version is counted. In addition, Ford currently enjoys the federal subsidy quota that Tesla has long since depleted, which is $7,500 per vehicle (chart by: Jenwayz).Finally, it is necessary to launch the low-price attack that has been used in the Chinese market for more than a year on the North American soil. The previous entry-level price of Model Y in North America was $49,990 for the full-drive long-endurance version, which is obviously not cheap compared to the $42,895 for the Mach-E rear-wheel-drive standard continuation (including the $7,500 subsidy, and Mach-E’s entry-level price is $35,395). Therefore, the rear-wheel-drive standard continuation is a must. (Dear readers, if you don’t agree with the competitiveness of this car, then ignore this paragraph.)
In addition, here is a comparison picture of the two cars, taken by Detroit News.
Overall, the Chinese electric vehicle market is indeed at the forefront of the times, being able to first force Tesla’s low-price attack on the North American soil, which is also attributed to the Chinese new car manufacturers leading the era as shown in the following picture.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.