Tesla Motors Inc. will sell its Model S sedan in China from CHY734,000 ($121,280) as it tests the demand for electric vehicles in the largest vehicle market in world. According to Autohome, a car-pricing Web site, the price of the 85-kWh Model S lumps it in the same bracket as the Audi S5 sedan and the BMW 5-series GT sedan.
The CHY734,000 is also around 50 percent more expensive than in the United States, where the company is selling an equivalent model for $81,070, according to Tesla’s statement.
The carmaker said that the price of a Model S in China is the same as the price of a Model S in the US, but it seems higher because of unavoidable taxes, customs duties and transportation costs. “If we were to follow standard industry practice, we could get away with charging twice as much for the Model S in China as we do in the US,” the carmaker said in a statement on its Web site.
China is grappling to meet a target of having 5 million alternative energy-powered vehicles on its roads by the end of the decade due to lack of charging stations, high costs and concerns about safety and range of such units. The entry of Tesla into China is being observed closely by other carmakers that have been trying to convince local consumers that electric vehicles are worth their money.
The Chinese government unveiled a program in September 2013 that focuses on promoting the use of new-energy vehicles in three regions anchored by the cities of Beijing, Shanghai and Guangzhou, employing subsidies through 2015. Local governments are to grant matching subsidies on top of incentives by central government up to CHY60,000.