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This article was published on May 1, 2020

Tesla pulls a slick sales move in China, lowers Model 3 price to fit new subsidy limit

I hate to say it, but good move Tesla

Tesla pulls a slick sales move in China, lowers Model 3 price to fit new subsidy limit

Tesla has just dropped the price of its Model 3 in China so that it continues to be eligible for subsidy money. The news comes days after the Chinese government announced that it was reducing subsidies.

The electric vehicle company announced the move earlier today, Reuters reports. Previously the standard Tesla Model 3 cost 323,800 yuan ($45,800), but with a 10% price reduction and a 20,250 yuan ($2,900) subsidy, it now costs 271,550 yuan ($38,463).

[Read: Tesla’s self-driving tech will pivot to subscription service — good shit, or just shit?]

In 2015, the Chinese government said it would get rid of the subsidies by 2020, but last week it said that it would just lower the upper limit by 10%. Now, in China, only vehicles costing less than 300,000 yuan ($42,479) are eligible for the subsidy.

In attempts to get more drivers out of gasoline vehicles and into cleaner electrically powered cars, many governments offer money towards their purchase for private buyers. But there are restrictions, usually an upper price limit.

Generally speaking, EVs are a little more expensive compared to their gasoline counterparts. At the lower end of the market, subsidies — coupled with an EV’s lower running costs — can be enough to help drivers make the shift.

Cutting subsidies isn’t uncommon, and they won’t be offered forever. Earlier this year, the UK government cut its electric vehicle grant for the 10th time.

But it’s a good sales move from Tesla to keep the vehicle affordable for more people for the time being.

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