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China Outlines Cut Of EV Subsidies By The End Of 2022
Tesla adjusted Made-in-China Model 3 prices up... because of the high demand?
Mark Kane 
By: Mark Kane
Apr 25, 2020 at 10:53am ET
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China officially announced a two-year extension of the subsidies for all-electric cars, through the end of 2022, although after the three month transition period (from July 23) rules change. Without the announcement, subsidies would end this year (on December 31, 2020).
The available amount of subsidies (of 24,750 yuan/$3,495 we believe) will decrease:
- by 10% this year, probably 22,500 yuan (from July 23)
- by 20% in 2021, probably 20,250 yuan
- by 30% in 2022, probably 18,000 yuan
- probably no subsidies from 2023
Additionally, only all-electric cars with a price under 300,000 yuan ($42,377) will be eligible for the subsidies. There is one exception - BEVs with swappable batteries are not limited by the price. Is this a nod to NIO?
We assume that the requirement of a minimum NEDC range of 400 km (250 miles) remains in power.
At the same time, the Chinese government announced a purchase tax exemption for New Energy Vehicles purchased from January 1, 2021 to December 31, 2022.
Subsidies for all-electric buses will remain the same in 2020, but will decrease by 10% in 2021 and by 20% in 2022.
See also
Made-in-China Long Range Tesla Model 3: Everything We Know
Tesla Giga Shanghai Construction Progress April 22, 2020: Video
As in the case of any change in policy, upcoming cuts of subsidies temporarily increases demand, to catch onto the "old rules".
We believe that this is the reason why Tesla immediately increased prices of its two models: Standard Range Plus and Long Range Made-in-China (MIC) Model 3:
- Standard Range Plus RWD (MIC): *303,550 yuan ($42,874) from 299,050 yuan ($42,502)
available now - Long Range RWD (MIC): *344,050 yuan ($48,595) from *339,050 yuan ($48,187)
deliveries from June 2020
* after including a subsidy of 24,750 yuan ($3,495)
The price of the Performance version was not affected, because it's scheduled for Q1 2021 anyway.
We assume that Tesla will decrease the price of the Standard Range Plus version to keep it below the 300,000 yuan limit on July 23, 2020. The post-subsidy price would be then 277,500 yuan ($39,194). Actually less than today so there is no point in hurrying up to buy the Standard Range Plus. There might be a point to hurry up with the Long Range RWD though.
What do you think?
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Gallery: Tesla Model 3 (design studio China)
14
Updated Tesla online offer in China (USD prices as of April 24, 2020):
-
Standard Range Plus RWD (MIC): 303,550 yuan ($42,874)
available now- 445 km (277 miles) of range (NEDC)
- top speed of 225 km/h (140 mph)
- 0-100 km/h (62 mph) in 5.6 seconds
-
Long Range RWD (MIC): *344,050 yuan ($48,595)
deliveries from June 2020- 668 km (415 miles) of range (NEDC)
- top speed of 225 km/h (140 mph)
- 0-100 km/h (62 mph) in 5.3 seconds
-
Performance, Long Range AWD (MIC): 419,800 yuan ($59,292); pre-subsidies
deliveries from Q1 2021- 530 km (329 miles) of range (WLTP)
- top speed of 261 km/h (162 mph)
- 0-100 km/h (62 mph) in 3.4 seconds
* after including a subsidy of 24,750 yuan ($3,495)
More info on subsidies from Moneyball:
Sources: Reuters, Gasgoo, Gasgoo
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