Tesla rolls out the Model 3 in China ahead of schedule in the sales push

BEIJING/SHANGHAI (Reuters) – Tesla, Inc has started the delivery of Model 3 cars in China slightly ahead of schedule, as it looks to revive sales which have been hit hard by the Chinese-AMERICAN trade tensions.

FILE PHOTO: 2018 Tesla Model 3 electric car is seen in this photo illustration taken in Cardiff, California, V. S., June 1, 2018. REUTERS/Mike Blake

The California-based firm has already adjusted prices and added a lower-cost Model 3 variant with the line-up to make AMERICAN cars more affordable in China in the midst of high import tariffs.

The AMERICAN luxury electric vehicle, said in a statement that the possession of a delivery event in Beijing on Friday, “marks an important milestone for the market”.

It had initially projected in March start for Model 3 deliveries in China, the world’s largest car market, where total car sales ended in 2018 for the first time in more than two decades.

The first deliveries will go to customers who have their orders placed before the end of 2018, Tesla said. Buyers who ordered this year will start receiving their cars from the end of March.

“I see her earlier-than-expected supply as an attempt to try and intervene in the market as soon as possible” in the midst of increasing competition, said Alan Kang, an analyst at LMC Automotive.

“Many of the potential customers will not only be seen Tesla’s Model 3, but also other electric car models such as the Jaguar, the I-PACE or that of Audi and Mercedes-Benz,” the Shanghai-based analyst added.

While car sales in China have declined as the economy slowed, Tesla ‘ s company was hit hard after Beijing raised tariffs on AMERICAN car imports up 40 percent in July in the middle of the trade tensions. China has since temporarily suspended the additional 25 percent rate, making it among the 15% level.

Tesla currently imports all the cars it sells in China, but is in the process of building a factory in Shanghai that will manufacture the Model 3 cars in the initial phase and help minimize the impact of the working class.

The United States and China are in the middle of the talks aimed at resolving their trade dispute. If the two parties fail to reach an agreement by March 1, united states. rates on $200 billion of Chinese imports are set to rise to 25 percent from 10 percent.

Tit-for-tat tariffs between the two top economies have upended international trade flows.

Tesla’s earlier than scheduled delivery, however, the car maker was dealt a setback on Thursday, after Consumer Reports, an influential AMERICAN magazine, pulled its approval for Model 3, citing problems with the reliability.

The magazine’s decision to cancel an approval, less than nine months after the recommendation of the electric sedan, questions about the quality that Tesla has gotten since the Model 3 is difficult to launch.

Reporting Yilei Sun and Brenda Goh; Editing by with the ipad has Himani

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