China-made Tesla Model 3 price could undercut Hyundai Kona Electric

News that the Tesla Model 3 may come from China in the future has Australian electric vehicle enthusiasts speculating what this could mean for price.

It’s well known that electric cars are more expensive than combustion engine equivalents, and while the Tesla Model 3 is touted as a “mass-market” vehicle in the US, in Australia its current $73,900 sticker price before on-road costs and without add-ons, puts it into the realm of “executive” vehicles.

For premium variants plus add-ons it does not take long for the sticker price to rise to levels beyond the luxury car tax threshold, and so to “on-road” prices of well above $110,000.

As reported by The Driven on Monday, sources told Bloomberg that Tesla is planning to ship electric cars made at its Shanghai Gigafactory to Australia, New Zealand and Singapore as well as Europe, contrary to statements that it would only serve the “greater China” region.

Given Tesla’s endeavours to lower production costs in China by sourcing parts locally, it’s worth diving into what this might mean for the Tesla Model 3 price in Australia, and – eventually – possibly also the Model Y.

So how much would the Tesla Model 3 cost if it was made in and shipped from China?

Using figures based on a previous Tesla price estimator and industry knowledge on shipping costs and other fees, the new potential price is in – the China-made Tesla Model 3 base price could be as low as $57,000 in Australia.

That’s $3,000 less than the base Hyundai Kona Electric which sells from $59,990 (all before on-road costs) and is the second most popular EV (by 2020 sales figures) in Australia.

If Tesla came through with this pricing, it would also mean a massive $16,900 price drop from the Tesla Model 3’s current price of $73,900.

It would also mean it is possible to add-on Tesla’s Full Self Driving package without attracting the luxury car tax.

We’ve based this pricing on a nifty calculator put together by Tesla owner Alexei Watson, that we have used to give insight into Model 3 and potential Model Y pricing in Australia in the past.

Using current Model 3 pricing in China, and estimated import costs of around $2,500, the new “MIC” (made-in-China) calculator shows that to get a base Standard Range Plus Model 3 on the road could be just $66,390 – very close to the original base $66,000 before on-roads when the Model 3 was first introduced in August 2019.

There are however some caveats: The China-made Model 3 currently comes in black as standard, whereas the Tesla Model 3 made in Fremont comes with white as standard.

But there could also be a price drop for red, which is $2,900 in Australia (where other optional colours are $1,500 extra), because in China, all other colours including red cost 8000 yuan extra ($A1,616) for the Model 3.

A made-in-China Model 3 would also come with the less energy dense LFP battery and therefore possibly lower range, although as noted on in Monday’s article Musk has said other efficiencies being worked on by Tesla help to make up for this.

This could also include the more efficient Model Y heat pump, one of several upgrades sources report Tesla is planning to apply to the made-in-China Model 3.