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Tesla Model 3 gross margin could be as high as 39% in China: report

MIC Model 3 panels and trim (Source: Ray4Tesla | Twitter)

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5 years ago

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Recent reports from China point to the idea that the Made-in-China Tesla Model 3 Standard Range+ is making the electric automaker money hand-over-fist, with a nearly 40% gross margin. The large margins Tesla is making on the SR+ Model 3 indicate the company is making a lot of headway in improving its vehicle production process, potentially making way for even more affordable cars.

Tesla owner-enthusiast @Ray4Tesla spotted a post from Chinese technology company Sina Technology, which recently posted details about the MIC Model 3 SR+ and its sizable gross margins.

Sina indicates that the MIC Model 3 SR+ delivered by Tesla in Q1 2020 has a gross margin of 39.37%. This means that with its ¥271,550 price tag ($38,275), the vehicle actually costs ¥188,700 to produce ($26,653). Assuming that Sina‘s figures are accurate, Tesla China could be making a profit of around ¥82,285 ($11,622) per Model 3 SR+ sold.

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This gross price margin exceeds that of any other luxury vehicle, according to Sina.

Automotive veteran Sandy Munro once said that Tesla’s advantage post-COVID-19 would be its ability to build cars in an efficient fashion thanks to the company’s vertical integration. Tesla maintains a shortlist of suppliers for things that the company doesn’t build in-house, but many of its car’s elements are manufactured at or around the company’s Fremont facility. For example, Tesla’s seats are produced at a warehouse just a few minutes from the Fremont production plant.

The vertical integration saves Tesla money by not having to pay suppliers, which also ties into the company’s ability to handle substantial demand shifts.

Tesla has seemingly seen an increased demand in China during the first six months of production at Giga Shanghai. Despite the company’s low sales numbers in April, sales picked up once more as additional configurations of the Model 3 was offered. It should further be noted that April’s dip was not due to decreasing demand. It was because Tesla planned to reduce the price of the SR+ configuration of the sedan to qualify for federal incentives. In May, sales tripled, and the Model 3 was once again the most popular EV in the country.

Tesla’s Chinese battery supplier, CATL, recently developed a million-mile battery pack and has successfully developed a cobalt-free assembly that will reduce the cost of manufacturing. Cobalt is the most expensive metal used in the NCA battery packs that Tesla used. However, Tesla recently received approval to use cobalt-free Lithium iron phosphate batteries (LFP) for its Model 3 in China. This will reduce production costs even further and may even lead to additional price cuts down the road.

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Tesla sold 11,095 Model 3s in China in May, according to the CPCA, making it the most popular electric car in the country by a country mile. Several factors drive the car’s popularity, but if Tesla can continue to dial-in price cuts while demand increases, the Model 3 could become the most popular car in China altogether.

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Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Cybertruck

Tesla clears the air on Cybertruck ‘deactivation’ video that is obviously fake

Tesla has cleared the air on the viral video, stating it is fake.

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6 hours ago

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August 11, 2025

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Credit: Cybertruck | X

Tesla has cleared the air regarding a video that has been circulating, where the owner claims his Cybertruck was “deactivated” by the company while he was driving.

The video was shared on X and showed a driver pulled over on the side of the road, claiming his Cybertruck had been deactivated by Tesla in the middle of traffic. It is very obviously fake to those who know the company, but these kinds of things have a tendency to pick up steam.

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The video shows a screen that says:

“Tesla Cybertruck De-Activated. Critical Issue Detected | Contact Customer Service, Comply with Cease & Desist to Re-Activate. Update Failed, Return to Dealer.”

The same person who posted the video also shared an image of what appears to be a Cease and Desist letter from Tesla, but it is also likely fake:

The company finally responded to the video on Monday afternoon, stating that the video is, in fact, fake, reiterating that it will not disable vehicles remotely for any reason.

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It is a shame that these types of things happen, especially as people are prone to believe anything they see on the internet. As there is so much misinformation circulating surrounding Tesla and its CEO Elon Musk, it is no surprise that someone would leverage the situation for their own benefit.

If that Cease and Desist letter is not real, perhaps the next one might be. These types of things can truly cause damage to a company’s reputation, and someone getting an idea that Tesla would remotely deactivate a car could prevent them from buying one.

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Elon Musk

Elon Musk is stepping up for Tesla Service in a big way

Elon Musk has stepped up to resolve a handful of customer issues regarding vehicle service.

Published

8 hours ago

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August 11, 2025

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tesla service
Credit: Tesla

Elon Musk is stepping up to help customers in a big way, especially when they are having issues with Tesla’s Service.

Perhaps one of the biggest advantages Tesla owners have is access to Musk through X, his social media platform. Over the years, we’ve seen Tesla add features, refine its cars’ performance, and more, all through asking Musk directly through a post.

Now, Musk is stepping up in another way by resolving a few Service complaints that customers had.

The first occurred last week when a recall on a Tesla battery was not honored by Service. The company sought $30,000 for a replacement and labor, which was not right. Musk responded that he would personally investigate the matter. The vehicle was fixed at no cost as it was a recall, and was ready for pickup the next day.

It also revealed a new strategy Tesla is using to combat service communication issues:

Tesla creates clever solution to simplify and improve its Service

The next occurred with a Cybertruck owner who was in Japan. Their car was parked at an airport in the U.S. and had lost a vast majority of its state of charge, leaving them just fifty miles of range at the time.

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Musk reached out to the owner and said Service will take care of the car and will investigate the cause of the battery drain:

There are not too many companies out there where the CEO will get involved with individual issues like these. It’s pretty exclusive to Tesla, as Musk has commonly stepped up to resolve complaints with vehicles or to confront features that some owners might find useful.

Service has been a weak point of the company for some time, but it has worked to refine and resolve customer complaints by building more Service Centers across the world that can handle these issues.

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Elon Musk

Tesla CEO Elon Musk confirms Robotaxi is opening to the public: here’s when

Anyone will be able to request a Tesla Robotaxi in September, Elon Musk said this morning.

Published

10 hours ago

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August 11, 2025

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Credit: Joe Tegtmeyer | X

Tesla CEO Elon Musk has confirmed that the company’s Robotaxi platform is opening to the public, and he even gave a timeline for when anyone will be able to access one for a ride.

Tesla’s Robotaxi platform launched to a small group on June 22 in Austin, Texas. The company has continued to expand the number of riders and its geofence over the past month and a half.

Tesla officially launches Robotaxi service with no driver

Additionally, it launched rides in the Bay Area of California, but it differs slightly, as the Texas Robotaxi platform does not utilize a Safety Monitor in the driver’s seat. In California, the monitor sits in the driver’s seat.

As the geofence, service areas, and testing populations expand, Tesla fans are awaiting their elusive emails that enable their ability to use the Robotaxi platform. It now seems that the email will come soon, as Musk said Tesla will open up public access to Robotaxi next month:

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Tesla has been prioritizing safety over anything else with the launch of the Robotaxi platform, which is why it has been slow to push invitations to new riders. It is confident in the abilities of the platform and its Full Self-Driving suite, which has been proven with data.

However, even a single accident could set Tesla back years in terms of its development of self-driving cars. It is not a risk it is willing to take.

Musk said during the recent Q2 Earnings Call:

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“We need to make sure it works when the vehicles are fully under our control. It’s kind of one step at a time here. We don’t want to jump the gun. As I said, we’re being paranoid about safety. But I guess next year is I’d say confidently next year. I’m not sure when next year, but confidently next year, people would be able to add or subtract their car to the Tesla, Inc. fleet.”

As the platform will expand in Austin and the Bay Area for anyone, Tesla still continues to reiterate that Robotaxi will be available for everyone sometime next year, as Musk said in the quote above.

Things will continue to improve over time, and Tesla will likely expand its geofence in both regions in the coming weeks. It has already done that in Austin twice, with about a doubling in size occurring both times.

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