China could prove to be a market of huge importance for Tesla. So as the company prepares to bring its Model S to the People's Republic, it's taking a bold and unconventional approach on pricing. For the Chinese market, the Model S will cost ¥734,000 — or about $121,000 according to today's exchange rates. That's higher than what US customers pay, but nowhere near the rates luxury cars usually demand in China. "We care about doing the right thing for our customers – no matter where they live," reads a Tesla blog post announcing the MSRP.
Expensive, but cheaper than other cars in its class
Instead of offering numerous battery pack sizes for the Model S as it does in the US, Tesla is releasing only the large-battery version (rated at 85 kWh) in China. Here, that option normally tacks an extra $10,000 onto the car's $69,900 starting price, which itself includes a sizable federal tax credit. Tesla says "unavoidable taxes, customs duties and transportation costs" also contribute to the higher cost. The automaker's rivals typically price their cars much higher when they make the journey to China. But Tesla wants to make sure Chinese shoppers don't make a direct link between price and quality. "We know that our competitors will try to convince Chinese consumers that our relatively lower price tag means the Model S is a lesser car, when the real reason their car costs more is that they make double the profit per car in China compared to the United States or Europe," the company says.
"We care about advancing the cause of electric cars in China."
Tesla says it plans to built a Supercharger network in China that will help its customers charge up on the road. 70 Supercharger stations are currently spread across the US. By the end of 2014, the company aims to have 80 percent of the US population and parts of Canada within range of a Supercharger. Spreading that convenience across China is easier said than done, but Tesla's pricing shows that Elon Musk and Co. are taking the challenge seriously.