Tesla Giga Shanghai

Tesla Poised to Produce Model Y Vehicles in China

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Tesla has obtained permission to start producing and selling the Model Y in China by next year. The latest update comes after the automaker received approval from the Chinese government to register its new Model Y vehicles earlier this month.

Tesla is set to significantly ramp up total production and delivery outputs in 2021 via its Gigafactory Shanghai plant.

What Were The Immediate After-Effects of That Approval?

It did not take much time for Tesla to start reaping the benefits. The company has secured tax exemptions from the Chinese government, as part of the latter’s subsidy program for new energy vehicles (NEVs).

According to Tesla owner and investor @Ray4Tesla, the Model Y has been included in the 12th batch of NEV exemptions. This means that Model Y vehicles will be exempted from the 10 percent purchase tax rate that is implemented in China.

The Model Y: A Strategy That Differs From Other Tesla Vehicles

Tesla opted for a new car introduction strategy for the Model Y. The company is only introducing the Model Y in new markets once the car is being produced there. 

Tesla will adopt the same strategy once production starts at Gigafactory Berlin. Once Model Y vehicles are rolled out from Germany, it will start exporting the cars in Europe.

Previous vehicle programs involved launching in multiple markets with cars imported from Tesla’s Fremont factory in California.

Once Tesla starts ramping up Model Y production in China, there could be a significant increase in sales in the country. 

According to brokerage firm Tianfeng Securities, Model Y sales alone can amount to 30,000 units per month:

“After mass production of China-made Model Y, monthly sales are expected to reach 30,000, and annual sales are expected to reach 360,000. It is estimated that Tesla’s overall sales will reach 880,000 in 2021, an increase of 76% year-on-year. And sales in 2022 will reach 1.28 million, an increase of 45% year-on-year.”

The note also mentioned that the Model Y’s entry price could drop to 275,000 yuan once it is mass-produced. At current exchange rates, ¥275,000 is equivalent to $41,800.3. 

Reminder: Model Y Specifications

The Performance variant of the all-electric crossover possesses impressive specifications. It boasts an estimated 303 mile-range (487.7 kilometers) per single charge. 

It can go from 0 to 60 mph in 3.5 seconds. The Model Y has a top speed of 155 mph (249.448 km/hr). The Performance variant is currently priced at $52,190.

The Long Range AWD iteration of the Model 3 sports a 326-mile (525 kilometers) range. It can go from 0 to 60 mph in 4.8 seconds. It has a top speed of 135 mph (217.2 km/hr), and retails at $42,190. 

All in all, this further demonstrates the importance of the Chinese market for Tesla’s global expansion strategy.

Do you think the Model Y’s price will eventually decrease once the vehicle is mass-produced? Let us know in the comments section!

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