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Tesla’s China-made Model 3 will be a cash cow for the automaker as margins set to improve even more

The Made-in-China Model 3 (Credit: Tesla China)

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A new report by equity research firm suggests that Tesla’s gross margin for Made-in-China (MIC) Model 3 could increase to 40 percent or even higher, and with higher profit margins, the electric car manufacturer can create the conditions that will further help stimulate sales in the country.

The report published by China-based equity firm Chuancai Securities and shared with Teslarati by Tesla Model S/X owner and Twitter user Ray4Tesla, says that parts domestication will be key to achieve higher profit margins with the MIC Model 3.

“We assume that depending on the progress of Tesla’s parts domestication, the cost of raw materials will fall by 10%-20%. In this case, gross profit margin of Model 3 produced by the Chinese factory will reach more than 35%, which is much higher than the American factory by about 20% gross profit level,” the report reads.  In October 2018, Tesla said that its Model 3 gross margins were more than 20 percent but this was adjusted when it decided to drop the price of the electric sedan to make it accessible to more US buyers.

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The report also estimates that after the localization of parts, Tesla’s expenses for raw materials for the China-made Model 3 will drop by 10 to 20 percent. It also takes note of cheaper manufacturing costs and labor costs. Taking into account all of these factors, the researchers concluded that the total production cost may fall by 20-28 percent and thereby further improving profit margin.

This new report from China practically says that the MIC Model 3 has the potential to be its cash cow — read: high volume sales and higher profit margins. This is aside from the fact that Tesla CEO Elon Musk has also formally launched the Model Y program in the country during the event for the first public deliveries of the company’s mass-produced electric sedans. According to the report, buyers of the affordable SUV in the country might still enjoy preferential purchase tax, from which its smaller sibling was also exempted from.

Tesla has the potential to claim China, the biggest automotive market in the world, to be its strong foothold. If that happens, it can boost the possibility of sustained profitability for the brand that Musk wants to achieve.

With Musk planning to create an engineering and design center in China, it will not be a surprise if the Gigafactory 3 will play a key role in conquering potential markets in Asia and in pushing for the growth of the brand int its existing markets in the region.

The analysis of the researchers is consistent with earlier rumors that Tesla can further lower the price of the Model 3 once it sources parts, including expensive parts such as its battery, from local suppliers. For now,  Tesla has lowered the price of the Model 3 in China to around $42,919 from the original price tag $50,000 as the new year kicked off, a move that practically undercut other brands such as BMW and Mercedes that offer vehicles in the same segment and the electric car manufacturer surely sparked more interest as showrooms in the country were filled with potential buyers.

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At present, Tesla’s Gigafactory 3 in Shanghai already has a run rate of 3,000 units per week and plans to hit that production goal as more workers are added to the frontline.

A curious soul who keeps wondering how Elon Musk, Tesla, electric cars, and clean energy technologies will shape the future, or do we really need to escape to Mars.

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Tesla launches hiring for Robotaxi program in its twentieth country

Overall, the hiring signals Tesla’s aggressive timeline for global dominance in autonomous mobility.

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Credit: @AdanGuajardo/X

Tesla has launched a hiring initiative for its Robotaxi program in its twentieth country, as the company posted two new jobs in Thailand this week.

Tesla is hiring in Bangkok and Kowloon for the Vehicle Operator position, which is related to data collection, and is the first in Thailand, but the twentieth country overall, as the company tries to expand into other markets.

Tesla has had active job postings for Vehicle Operator positions in the United States, India, Israel, Taiwan, Germany, the Czech Republic, Hungary, the UK, Finland, Switzerland, Sweden, the Netherlands, Austria, Spain, Norway, Italy, and Turkey in past listings.

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These postings are not all currently available, likely because the roles have been filled.

Thailand is the most recent, and broadens the company’s potential path to expanding its ride-hailing program, which is only active in the United States in Austin, Texas, and the California Bay Area, so far.

These roles typically involve data collection, which assists in improving Autopilot and Full Self-Driving operation. Tesla’s self-driving programs utilize real-world data that is accumulated and stored, observing vehicle and traffic behavior, as well as tendencies that are performed by human drivers to help increase safety and overall performance.

Overall, the hiring signals Tesla’s aggressive timeline for global dominance in autonomous mobility. Although the company has several high-profile rivals and competitors in the field, it has established itself as a main player and a leader in the development of autonomous technology, especially in the U.S., as its FSD suite is refined on almost a weekly basis.

The Full Self-Driving suite is available in seven countries and territories currently, including the U.S., Canada, China, Mexico, Puerto Rico, Australia, and New Zealand. Its biggest goal for expansion is currently the European market, where regulatory hurdles have been the main bottleneck prolonging its launch on the continent.

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Tesla has performed months of testing in various European countries, including France and Spain, and does have support in some areas from various regulatory agencies. However, the company is hoping to get through this red tape and offer its suite in Europe for the first time, hopefully this year.

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Tesla China rolls out Model Y upgrades, launches low-interest financing

These strategies are aimed at improving the ownership experience and keeping vehicle pricing competitive in the world’s largest electric vehicle market.

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Credit: Grok Imagine

Tesla has rolled out minor updates to the five-seat Model Y in China, upgrading the vehicle’s center display to a higher-resolution 16-inch 2K screen. The electric vehicle maker also introduced attractive financing options, including 7-year low-interest rates, to offset the new purchase tax on EVs. 

These strategies are aimed at improving the ownership experience and keeping vehicle pricing competitive in the world’s largest electric vehicle market.

Five-seat Model Y gets larger, better display

With its recent update, all three variants of the five-seat Model Y now feature an upgraded 16-inch 2K resolution center display, which replaces the vehicle’s previous 15.4-inch 1080p panel. This screen was already used in the six-seat Model Y L, and it offered improved visual clarity. Tesla China has also updated the Model Y’s headliner to black, giving the vehicle a sleeker appearance.

Prices of the five-seat Model Y remain unchanged at RMB 263,500, RMB 288,500, and RMB 313,500 for the respective trims. This update enhances the cabin experience as domestic rivals are already adopting high-resolution screens. As noted in a CNEV Post report, some domestic automakers have begun rolling out vehicles equipped with 3K-resolution displays. 

New financing offers

Tesla also launched ultra-long-term financing offers for its locally produced models in China, which include the Model 3 sedan, the five-seat Model Y, and the six-seat Model Y L, through January 31, 2026. The 7-year option features an annualized fee rate as low as 0.5%, which is equivalent to 0.98% interest. This is expected to save customers up to RMB 33,479 ($4,790) compared to standard rates.

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A 5-year zero-interest plan is also available, and it has been extended to the Tesla Model Y L for the first time. These incentives help offset China’s new 5% purchase tax on New Energy Vehicles (NEVs) in 2026-2027. Some of Tesla’s rivals in China have announced in recent months that they would be covering the purchase tax owed by buyers early this year. 

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Tesla Model Y’s new feature lands driver in hot water from police officer

“He gave me a warning and told me to get it fixed.”

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Credit: Grok

Tesla Model Y received a slew of both interior and exterior upgrades when the company refreshed its best-selling vehicle last year.

However, one of the more notable changes from an exterior perspective landed a driver in hot water with a local police officer, who was confused about the situation with the taillight bar and its ability to alert other drivers of a reduction in speed.

The new Tesla Model Y taillight with taillight glow

A Tesla Model Y owner in Indiana recently noted in a Facebook post that he was pulled over because a police officer thought the vehicle’s taillights were not turned on. However, the Model Y’s new rear light bar, which spans across the entire width of the vehicle, is more than visible in both light and dark conditions.

The incident, which was first spotted by Tesla Oracle, brings to light the interesting changes and perception of vehicle design that Tesla has brought forth with the new Model Y. We know some things might be head-scratching to some drivers, notably the Matrix Headlight technology present on the car, but this one truly baffled us.

The post stated:

“Just got pulled over for my tail lights not being “on” i told the officer it’s brand new. It has 1100 miles. I told him the red light bar is the taillight. The brake lights, both turn signals, and the red bar was on/worked. He told me that where the brake lights are, it should be illuminated there also. He gave me a warning and told me to get it fixed. Had anyone else had this kind of issue?”

Having the police officer tell a driver to “get it fixed” when it is a completely legal and functional design is pretty crazy.

However, the rear taillight bar, which glows and really gives the new Model Y a distinct difference between its previous iteration, is more than recognizable as a brake light and an indication of a reduction in speed.

Regulatory language for vehicle designs indicates that the light has to reach a certain number of lumens, or brightness. Lars Moravy indicated this on an episode of Jay Leno’s Garage when he and Tesla Chief Designer Franz von Holzhausen explained some of the details of the new Model Y.

This issue sparks some interesting dialogue people can have about vehicle design, and as more and more companies are adopting these futuristic looks, it seems law enforcement will have to get with the times and familiarize themselves with the regulations regarding exterior lights.

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