Connect with us

Investor's Corner

Tesla is “absorbing” part of import tariffs to lower Model S and X prices in China

[Credit: Tesla Zhejiang Members Club via vincent13031925/Twitter]

Published

on

In an effort to make its electric cars more affordable to customers in China, Tesla has announced that it is cutting the prices of the Model S and Model X by 12 to 26% despite the ongoing trade war between the United States and the Asian economic powerhouse. Apart from lowering the prices of its two flagship vehicles, Tesla also opted to adjust the price of the Model 3, which is currently open for orders in the country.

China is the world’s largest electric car market, and the segment is only bound to get more prominent in the coming years due to the country’s aggressive push towards renewable transportation. That said, China has opted to place steep import taxes for vehicles entering the country, resulting in Tesla’s electric cars, which are produced in the United States, being weighed down with a 40% tariff.

When the additional duties took effect last July, Tesla had no choice but to raise the prices of the Model S and X by 150,000 yuan ($22,647) to 250,000 yuan ($37,744), resulting in a fully loaded Model S P100D costing as much as 1.47 million yuan ($221,937) in China — significantly higher than the $147,000 price of the electric car in the United States. 

In a statement to Reuters, Tesla noted that the company would be lowering the prices of its vehicles in the country by “absorbing” part of the 40% import tariffs placed on its electric cars.

Advertisement
-

“We are absorbing a significant part of the tariff to help make our cars more affordable for customers in China,” Tesla stated.

Tesla further remarked that the Model 3, which is currently open for orders for Chinese reservation holders, is being given a price adjustment. When Tesla initially opened pre-orders for the vehicle, the Long Range Model 3 AWD started at 580,000 RMB (~$84,000) and the Model 3 Performance was listed with a starting price of 690,000 RMB (~$100,000). In the United States, the Long Range Model 3 AWD currently starts at $53,000 while the Model 3 Performance stars at $64,000.

With its recent price adjustments in place, Tesla noted to the publication that the Long Range Model 3 AWD would now start at 540,000 RMB (~$78,000), while the Model 3 Performance would start at 595,000 RMB (~$86,000). These prices, while still notably higher than the vehicle’s cost in the United States, offers a significant reduction from the Model 3’s initial price in China nonetheless.

Such adjustments could bode well for Tesla’s business in the country. Before the US and China’s trade war resulted in a 40% tariff for Tesla’s vehicles, after all, China’s Customs Tariff Commission under China’s cabinet announced that it would reduce car import duties from 20-25% to just 15%. The announcement was met with much enthusiasm by electric car buyers in the country, resulting in a Tesla gallery in Shanghai clearing out its entire Model X 75D inventory in 24 hours.

Tesla’s lowered prices for its vehicles in China is but the tip of the iceberg in the company’s plans for the country’s growing electric car market. Last month, reports emerged from local Chinese media that Tesla’s Gigafactory 3 in Shanghai — which would allow the company to produce vehicles locally, thereby avoiding import taxes — is getting funding from local banks. Tesla has also announced in its third quarter vehicle and production delivery report that it is accelerating the construction of Gigafactory 3, which is expected to produce both batteries as well as the Model 3 and Model Y.

Advertisement
-

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

Advertisement
Comments

Elon Musk

Tesla Cybercabs narrowly miss deadly Amazon cargo plane crash

An Amazon cargo plane crash near Miami’s airport stopped feet from dozens of Tesla Cybercabs.

Published

on

By

Photorealistic depiction of the Amazon Prime plane crash in Miami on Sep 3, 2026 near a fleet of Tesla Cybercab
Photorealistic depiction of the Amazon Prime plane crash in Miami on Sep 3, 2026 near a fleet of Tesla Cybercab

An Amazon Prime Air Boeing 767 cargo jet overran the runway at Miami International Airport on Sunday afternoon, killing five people and injuring five more. The jet, operated by North Carolina based carrier 21 Air as Flight 7598, touched down around 2 p.m. after arriving from San Juan, Puerto Rico, then crossed the airport perimeter, plowed across NW 67th Avenue and struck multiple vehicles before catching fire, according to the Associated Press.

Photos and video from the scene show the aircraft’s nose stopped within meters of a fenced staging lot holding dozens of gold painted Tesla Cybercabs, the steering wheel free robotaxi Tesla began putting on public roads in Austin last week. Miami-Dade Fire Rescue has confirmed the plane struck “multiple vehicles” but has not said whether any Cybercabs were among them, and neither Tesla nor airport officials have addressed the fleet directly.

The Cybercabs had not yet entered commercial service in Miami. Tesla’s existing Robotaxi operation there runs on modified Model Y vehicles and has been unsupervised since Ashok Elluswamy confirmed the detail on X in July.


Elon Musk offered the briefest of reactions. Replying to a Zero Hedge post about the Cybercabs sitting so close to the wreckage, he wrote a single word: “Weird.” He has not commented further, and Tesla has not issued a statement.

The timing puts Tesla’s newest vehicle near an unrelated but highly visible tragedy just days after its Austin debut, a launch that had already drawn scrutiny from federal regulators. The National Highway Traffic Safety Administration opened an audit how Tesla certified the Cybercab as compliant with federal vehicle safety standards, a process Teslarati covered after the vehicle’s September 3 launch event. That inquiry concerns the car’s lack of a steering wheel and pedals, not the Miami crash.

Advertisement
-

Investigators from the FAA and NTSB are focused on the plane, not the parking lot beside it. Flight data reviewed by outlets including Simple Flying show the 767 touched down around 170 knots, well above the 135 to 140 knot range typical for the aircraft, though investigators have not determined a cause. Amazon said it is working with authorities and that its priority is the safety of everyone affected.

Whether any Cybercabs were damaged, and what Tesla plans for the fleet parked near one of the country’s busiest airports, remain open questions.

Continue Reading

Featured

Tesla Cybercab is coming to Asia this month as US service officially begins

Tesla Asia says Cybercab will be on display in Hong Kong, Tokyo, Beijing and Shanghai this month.

Published

on

By

Concept image of Tesla Cybercab in the streets of Hong Kong via Grok
Concept image of Tesla Cybercab in the streets of Hong Kong via Grok

Tesla’s Cybercab is heading to Asia. The official Tesla Asia account posted on X Thursday, inviting Cybercab fans to “Come experience the future of autonomy in Hong Kong, Tokyo, Beijing & Shanghai.” The post went up within hours of Tesla’s own Cybercab milestone in Texas, where the company said Thursday it had begun offering rides in across Austin.

Exact dates and venues for the Asia tour haven’t been released yet, though Tesla Hong Kong replied to the announcement with “Cybercab will be on display in Hong Kong soon,” while Tesla Japan’s response pointed fans to a sign up page for updates. Neither post mentions test rides or a service area, and nothing so far suggests Tesla is launching Robotaxi operations in any of the four cities. Based on how Tesla has run past Cybercab tours, in Europe in late 2024 and at US shopping centers that same December, the Asia stops are almost certainly static displays at Tesla stores or public venues as a means to stimulate buzz for its future driverless ride-hailing service in the big cities.

The timing lines up with Tesla’s only prior Cybercab appearance in the region, a booth at the China International Import Expo in Shanghai last November, which Teslarati covered at the time. At that event, Tesla’s regional general manager for Shanghai framed the car as evidence of the company’s broader mission, a message Tesla has since formalized in its Master Plan Part IV, which states that “autonomous vehicles have the capacity to dramatically improve the affordability, availability and safety of transportation while reducing pollution, particularly in our increasingly dense global cities.” The same document is where Tesla lays out its “sustainable abundance” framing for Cybercab and Optimus alike, describing the two as the hardware behind an AI driven push to cut the cost of transportation and labor at scale.

Whether Cybercab actually operates as a robotaxi anywhere in Asia remains an open question, considering China has already pushed an autonomous ride-hailing market that’s run on homegrown players like Baidu’s Apollo Go and Pony AI. For now, the four city tour reads as a marketing push timed to Austin’s momentum.

Advertisement
-
Continue Reading

Elon Musk

OpenAI cites distrust of SpaceX in decision to drop Cursor partnership

OpenAI will cut SpaceX-owned Cursor’s model access in November, citing Musk’s history of broken contracts.

Published

on

By

OpenAI, the company behind ChatGPT, announced late Friday that it is ending its partnership with Cursor, cutting off the coding tool’s access to its models on November 12. The move comes two weeks after SpaceX completed its $60 billion acquisition of Cursor’s parent company, Anysphere, folding the popular AI coding assistant into Elon Musk’s growing SpaceXAI division.

In a post on its website, OpenAI said the decision came down to trust, not technology. “We cannot be confident that SpaceX will use our technology within our terms of service, based on our experience with Elon Musk’s companies violating contracts,” the company wrote. OpenAI pointed to two specific incidents: X, now part of SpaceX, allegedly breaking the terms of an existing OpenAI contract after Musk bought Twitter.

That lawsuit is the backdrop for all of this. Musk cofounded OpenAI in 2015, left the board in 2018, and sued Sam Altman and Greg Brockman in 2024, arguing they abandoned the company’s nonprofit mission for profit. A federal jury sided with OpenAI in May, finding Musk waited too long to sue rather than ruling on the merits of his claims. Musk said at the time he would appeal to the Ninth Circuit, calling the outcome a “calendar technicality” rather than a real judgment.

Elon Musk breaks silence on OpenAI trial decision

SpaceX’s interest in Cursor predates that verdict by weeks. The company first struck a deal with Cursor in April, securing an option to acquire it for $60 billion or pay $10 billion for joint development work instead. As Teslarati reported at the time, the logic was straightforward: Cursor was paying retail prices to Anthropic and OpenAI, two of its most direct competitors, every time a developer used its product, while SpaceX had idle capacity on its Colossus supercomputer, roughly the equivalent of a million Nvidia H100 GPUs, that Cursor could use to train its own models instead. SpaceX exercised the option in June, days after its own IPO, and the deal closed in mid-August.

Once it closed, Musk moved fast. On an all-hands call with more than 1,000 Cursor employees, he reportedly told staff that SpaceXAI’s Grok was playing catchup in the AI race, unlike Tesla and SpaceX in their own markets, and singled out Anthropic as the company to catch. Cursor CEO Michael Truell now reports directly to Musk inside SpaceXAI.

Advertisement
-

Elon Musk admits he was ‘clearly wrong’ about Anthropic

Losing OpenAI’s models leaves Cursor leaning harder on Anthropic’s Claude, which has its own compute agreement with SpaceX, and on Cursor’s in-house Composer model, the one SpaceX’s compute was supposed to accelerate in the first place. OpenAI framed the November deadline as maximum notice under its contract, and said it wants to “go above and beyond” to help developers through the transition. Whether Anthropic makes the same call is now the open question in AI coding.

Continue Reading