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China EV makers challenge Tesla Model 3 on price
Reuters | 2017/4/21

SHANGHAI   --  Tesla Inc.'s model 3  isn't due to arrive in China until next year, but already Chinese-funded EV startups are scrambling to launch models to go head-to-head against the mass-market sedan.
 
For leading Chinese electric vehicle startups such as Future Mobility, WM Motor and Singulato Motors, the key is that they will produce their cars locally, making them better able to match the Model 3's price. 

Tesla, which has largely enjoyed a monopoly in the premium EV market, is expected to price its Model 3 from $35,000 in the United States. Chinese buyers would expect to add 25 percent to that in import tariffs. 

The founders and CEOs of Future Mobility, WM Motor and Singulato acknowledge the Model 3 is the car to beat. 

The first vehicles they aim to launch in the next couple of years will be priced around 300,000 yuan ($43,500) or less, they told Reuters ahead of the Shanghai auto show, which opens to the public on Friday. 

"Between 200,000 yuan and 300,000 yuan," said Singulato's co-founder and CEO Shen Haiyin. 

The Chinese-funded firms' strategy is to beat the Model 3 in China by making their cars as more premium, yet cheaper than Tesla's mass-market electric car. The three startups see California-based Tesla's weakness in its inability to produce cars in China, the world's leading EV market. 

Tesla has denied recent talk in China that it is considering manufacturing its cars locally. "Tesla is deeply committed to the Chinese market, however these rumors are not true," the company said. 

To be sure, Tesla will be no pushover. This month, it overtook Ford Motor Co. in market value as investors embraced CEO Elon Musk's stylish high-performance cars that are continually upgraded with new technology. 

Tesla has competed only at low volumes in premium markets. The Model 3 must appeal to more price-sensitive consumers to reach its projected annual sales of 500,000 vehicles. 

'Competitive' pricing 
Daniel Kirchert, president and co-founder of Future Mobility, says his company plans to launch three models. The first, a premium midsize crossover, will arrive "before 2020", followed within three years by a sedan and a seven-seat multipurpose vehicle. 

All will be based on the same architecture and will share major components, "to achieve this very attractive entry price of about 300,000 yuan," Kirchert told Reuters. 

"It's a bit more than $40,000, a very competitive price positioning ... because Tesla customers buying the Model 3 in China would have to shoulder the cost of a 25 percent import tariff" unless the car is produced in China, he said. 

"We will be competitive because we produce the car locally," he added. 

Future Mobility will produce cars at a planned assembly plant in Nanjing, Kirchert said. The company also plans to make its crossover bigger and more luxurious than the Model 3.

"In the end, it's really about how premium you are," Kirchert said. "That's the real challenge." 

Singulato Motors unveiled its first "mass-production" car -- also a crossover -- in Beijing last week, and says it will be priced below $43,500. It has started taking pre-orders for a limited period from customers willing to make a $300 deposit. 

WM Motor plans to launch its first car, an electric plug-in crossover, in the second half of 2018, again priced to compete with the Model 3, co-founder Freeman Shen told Reuters. 

The car will be the first of three electric vehicles that the Shanghai-based firm plans to launch by 2020, by which time Shen says WM Motor should be selling 100,000 cars a year.
 
WM Motor showed a concept car to reporters Tuesday in Shanghai, which Shen said hinted at the mass-market model. The company aims to introduce the car by September 2018.

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