Tesla has reduced the price of its Model 3 rear-wheel drive version in China, aiming to strengthen its position in the world’s largest electric vehicle (EV) market amid rising competition from local automakers.
The updated price for the new Model 3 is now set at ¥259,500 ($36,279) — a cut of ¥10,000 or 3.7% from its launch price on August 12. Deliveries for the variant are expected to start this month.
This model is Tesla’s longest-range sedan, capable of covering up to 830 km on a single charge.
Price War in China
China’s auto market has been engaged in an aggressive price war, with carmakers offering deep discounts to win customers. The situation became so intense that in May 2025, Beijing issued a warning against excessive price cuts, saying they could threaten the stability and profitability of the EV industry.
BYD on the Rise
Despite government intervention, Tesla continues to feel the pressure from its biggest rival, BYD, which remains the world’s top EV manufacturer. BYD recently reported its first quarterly profit decline in more than three years, but its sales momentum in Europe has been strong.
Tesla, on the other hand, is facing challenges outside China. In July, the company’s European sales dropped for the seventh month in a row, falling 40% while BYD sales nearly tripled. The trend continued in August, with Tesla recording just 210 registrations in Sweden—an 84% decline compared to the same month last year.
Tesla’s price cut reflects the mounting pressure in China’s EV market and the growing competition globally. While BYD’s aggressive expansion is reshaping the industry, Tesla will need more than price adjustments to maintain its lead in Europe and keep pace in China.