Chinese car-making startups are already working hard to release cars to compete with the Tesla Model 3, even when there is still time for Tesla’s mass-market car to hit the Chinese electric car market. The Model 3 is due to arrive in China next year, but Chinese-funded startups like WM Motor, Future Mobility and others are moving quickly to produce a better EV, according to Reuters.
How Chinese EV makers plan to take on the Model 3
Recently, Tesla surpassed Ford and General Motors to become the most valuable automaker in the U.S. Tesla is no more a company that can be overtaken easily, and its competitors realize that, which is why they are already trying to produce cars that are cheaper and better than its upcoming mass-market car.
We have already heard of a few auto startups that are planning to take on Tesla, like Faraday Future and Lucid, but Reuters recently talked to a few more EV startups that plan to take on the yet-to-be-released Model 3.
WM Motor, Singulato Motors and Future Mobility all agree that the Model 3 is the car they want to supersede, notes Reuters. The Chinese startups told Reuters that the first cars they are aiming to release in the next few years will be priced around $43,500 (300,000 yuan) or below.
Shen Haiyin, CEO and co-founder of Singulato, said their aiming for prices “between 200,000 yuan and 300,000 yuan.”
Tesla at a cost disadvantage
Leading China-based EV startups like Singulato Motors and Future Mobility plan to make their vehicles locally. Their strategy is to take on the Model 3 in China by introducing more premium but cheaper cars by producing locally, notes Reuters. There were some rumors about Tesla considering producing its cars locally, but the automaker denied them.
The U.S. firm is expected to price its upcoming EV at $35,000 in the United States. In China, however, the price will increase by another 25% because of import tariffs. Given that the local startups will produce their cars in China, they will be able to evade those import tariffs.
Daniel Kirchert, co-founder and president of Future Mobility, says his company is planning to release three models. The first model is a premium midsize crossover SUV that will arrive before 2020, while the other two — a 7 seater MPV (multi-purpose vehicle) and sedan — will come within the next three years, according to Reuters. Last week, Singulato Motors revealed its first mass-production car in Beijing, and it will reportedly be priced below 300,000 yuan.
It is good to see young companies making big claims, but the main test will be to meet those promises. According to most industry estimates, to develop a car from scratch, it would take more than $1 billion, and we are not even discussing the manufacturing and sales challenges yet. Tesla also reportedly faced quite a few financial hardships, even when it was able to establish itself as a leader in EVs after the success of the Model S.