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Tesla China Uses LFP Batteries and Significantly Drops Model 3 Price

Tesla China lists new prices for the MIC Model 3 with a significant 8-11% price cut and new LFP, nickel, and cobalt-free batteries with more range.

For example, The Standard Range Plus Model 3, made at Tesla's Giga Shanghai not only has an 8% price reduction but also comes with a 468 km range, an increase of 5.1% or 23 km.

As expected the day before, according to reports, Tesla in China approved the orders for what is probably the world's cheapest Model 3 to date: On Thursday morning, the price and range information for the smallest variant, Standard Range plus (SR +) from the local Gigafactory, changed. Instead of the equivalent of 36,700 euros, it now costs around 33,800 euros, and the range even increased slightly to 468 kilometers. Tesla itself did not announce this, but according to previous reports, it is obvious that the new basic model contains cheaper battery cells based on LFP, which are supplied by the new partner CATL in China.

Tesla Model 3 LR Is Now Cheaper Too

In addition to the noticeably lower price, LFP cells have the advantage that they are very robust. Their weight per kilowatt-hour is higher, but the energy density is now sufficient even for the smaller Tesla models, as CEO Elon Musk had already indicated in advance. So far, Tesla has almost exclusively used more expensive NMC cells from LG Chem in China, which made the South Korean company again the world market leader before CATL in the first half of 2020.

Tesla has now not only lowered the price for the Model 3 SR +, but also for the version with a larger battery and all-wheel drive (LR). This should still be equipped with cells from LG Chem because the range information in the Chinese web configurator of the Model 3 remained the same. But the price dropped even more than the base Tesla: As an LR, the Model 3 is now available in China for 309,900 yuan. That is the equivalent of just under 39,000 euros and thus a good 10 percent less than before, while the Model 3 SR + was only a good 8 percent cheaper. According to the configurator, both variants are with the customer within 4 weeks of the order.

Teslamag questions if Europe will get Model 3s shipped from China, saying "With the price reductions, Tesla electric cars are unlikely to be as cheap anywhere as in China. In the USA, the smallest Model 3 currently costs the equivalent of around 32,400 euros, but before the sales tax of the respective state. For the long-range variant, around 40,000 euros before taxes are required in Tesla's home country - this would now be cheaper in China even if the US tax were 0 dollars."

Teslamag also adds that the new prices could also have relevance for European customers, as it was recently announced that Tesla is planning to export from the Gigafactory in China. So far, Europe has been supplied from the main factory in Fremont, and prices are significantly higher than in the USA or China.

Armen Hareyan is the founder and the Editor in Chief of Torque News. He founded in 2010, which since then has been publishing expert news and analysis about the automotive industry. He can be reached at Torque News Twitter, Facebok, Linkedin and Youtube.