It’s not due to arrive in China until next year, but already Chinese-funded, smart, connected plug-in car start-ups are scrambling to launch cars to go head-to-head against Tesla Inc’s “mass market” Model 3 sedan.
For leading Chinese electric vehicle (EV) start-ups 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 electric car market, is expected to price its Model 3 from $35,000 in the United States. Buyers in China 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 (roughly $43,500) or below, 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 more premium and yet cheaper than Tesla’s mass-market all-electric battery car.
The three start-ups see California-based Tesla’s weakness in its inability to produce cars in China, the world’s leading market for plug-in cars.
Tesla has denied recent talk in China that it was 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. It this month overtook Ford Motor Co in market value as investors embrace CEO Elon Musk’s strategy of offering stylish, high performance cars that are continually upgraded with features that rival automakers are still only testing.
Tesla has to date competed only in premium price classes at relatively low volumes. The Model 3 will need to appeal to more price-sensitive consumers to reach its projected annual sales of 500,000 vehicles.
Daniel Kirchert, president and co-founder of Future Mobility, says his company plans to launch three models. The first, a premium midsize crossover sport-utility vehicle (SUV), will arrive “before 2020”, followed within three years by a sedan and a 7-seater multi-purpose vehicle (MPV).
All will be based on the same vehicle underpinning architecture and share major components, “to achieve this very attractive entry price of about 300,000 yuan,” Kirchert told Reuters in a telephone interview.
“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 on the car”, unless it’s produced in China, he said.
“We will be competitive because we produce the car locally,” he added.
As well as making its car in China, at a planned assembly plant in Nanjing, Kirchert said Future Mobility plans to make the SUV bigger than the Model 3 and more luxurious.
“In the end, it’s really about how premium you are. That’s the real challenge.”
Singulato Motors unveiled its first “mass-production” car, also a crossover SUV, in Beijing last week, and says it will be priced below 300,000 yuan. It has started taking pre-orders for a limited period from customers willing to put down a deposit of 2,017 yuan.
WM Motor plans to launch its first car, an electric plug-in crossover SUV, 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 the Shanghai-based firm plans to launch by 2020, by which time Shen says WM Motor should be selling around 100,000 cars a year.
WM Motor showed a concept car to reporters on Tuesday in Shanghai, which Shen said hinted at the mass market model. The company aims to get the car to showrooms by September 2018.
(Reporting by Norihiko Shirouzu in SHANGHAI, with additional reporting/editing by Joe White in SHANGHAI; Editing by Ian Geoghegan)