Tesla will soon be producing Model Y on its Gigafactory Shanghai to further boost its sales in China.
Tesla has been preparing the production of the electric SUV and for the past nine months, the factory has expanded more than twice its size, according to an Electrek report.
Although Tesla never confirmed the Model Y production at Gigafactory Shanghai, a local analyst report suggests if this is true then it could boost the electric automaker's sales in the country by about four times.
Tesla China vice president Tao Lin said early this year that Gigafactory Shanghai will start producing Model Y SUV in first quarter of 2021.
Tesla could increase China sales by four times
Brokerage firm Tianfeng Securities has been following Tesla's journey in China. In a new report it released, the securities firm assumes to see Model Y sales increasing to 30,000 units per month as mass production of the electric SUV start in China. This could boost its annual sales to 360,000.
Tianfeng Securities also predicts that Tesla's overall sales in 2021 will increase by 76% as it is expected to reach 880,000. By 2022, the company will reach 1.28 million, which will be 45% increase from the 2021 forecast.
However, the analyst says to achieve such increase in numbers, Tesla would need to produce the upcoming China-made Tesla Model Y at a cheaper price of. In the third quarter of 2020, Tesla was only able to deliver a monthly average of more than 10,000 of Model 3 in China.
According to Tianfeng Securities' analysis based on Tesla's China-made Model 3 price and the US price of Model Y, the company could significantly lower the cost of the Model Y in China. In its research report, Tianfeng Securities found that Model Y and Model 3 only have price difference of about 6% to 9%.
This means if Tesla will mass produced Model Y in China, the company is expected to implement its price reduction strategy. "The entry price is expected to drop to 275,000 yuan (around $40,888)," according to Tianfeng Securities' price analysis, as reported by Seek Device.
This is significantly lower than the current price of the entry Model Y in the U.S., which is at $49,990 for the long-range model. A $9,000 price difference is huge and could definitely push customers to get their hands behind the Model Y wheels soon.
Tesla drops Model S price to $69,420
Elon Musk has been slashing the price of Model Y by a total of $5,570 in just two days!
The gauntlet has been thrown down!
The prophecy will be fulfilled.
Model S price changes to $69,420 tonight! — Elon Musk (@elonmusk) October 14, 2020
After reducing the price by $3,000 on October 14, the Tesla CEO Musk announced the price drop in Twitter on October 15 to $69,420. Tesla fans noted that inclusion of "420" in the new price. It was the share price at which Musk wanted to take Tesla back in 2018, but since he did not have money to cover the deal, Securities and Exchange Commission reprimanded him.
The price slash also came after Lucid announced the base price for its Air electric sedan at $77,400, which could go lower to only $69,900 for owners who are eligible for $7,500 federal tax credit on electric vehicles. However, if incentives are deducted, Tesla Model S could go down to just $63,920. It is now close to 20% price difference since starting the year at about $80,000.
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Written by CJ Robles