Tesla cuts starting price for China-made Model 3 cars by 8 percent

U.S. electric automaker Tesla reduce the starting price of its Chinese-made Model 3 sedans on Thursday by about 8% to 249,900 yuan ($36,805), once Chinese subsidies for electric vehicles are taken into account. The update on the company’s China website showed.

Previously, the starting price for Model 3 sedans made in Tesla’s Shanghai factory with a standard driving range was 271,550 yuan ($39,988), after state purchase subsidies.

Sources informed Reuters that the standard range Model 3 sedans would now come with lithium iron phosphate (LFP) batteries which are not costly than the nickel-cobalt-manganese (NMC) cells it used before.

Tesla did not reveal what batteries the cheaper version uses.

The price for Model 3 vehicles with a longer range is now 309,900 yuan ($45,636), down from 344,050 yuan ($50,665).

Tesla started to deliver cars from the Shanghai factory in December, helping it save on shipping expenses and tariffs for imported models.

Tesla sold over 11,000 vehicles, mainly Model 3, in August in China.

It is also building a new car manufacturing capacity for Model Y sports-utility vehicles in Shanghai and expects to start their deliveries from next year.