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Tesla VP Grace Tao explains China’s Model 3 and Model Y price reductions
After a challenging December, Tesla China adopted a number of strategies designed to improve its vehicle sales in the country. Among these was a price reduction on the domestically-produced Model 3 sedan and Model Y crossover. Recent comments from Tesla VP Grace Tao have now provided some insights into these price adjustments.
In a recent interview with local Chinese media, Tao was asked about Tesla China’s rather volatile pricing strategy. Similar to Tesla in the United States, Tesla China saw a number of price adjustments over the past year. This has resulted in some netizens in the country stating that Tesla’s pricing strategy is “too casual.”
Addressing the inquiry, Grace Tao explained that the pricing strategy of Tesla China’s vehicles is “actually a forecast of the company’s cost changes in the next period of time.” She also explained that the landscape had changed now, at least compared to the last year due to the end of the pandemic.
“The biggest difference between 2023 and last year is that the epidemic is basically over, and we believe that the supply chain has largely returned to normal and will not experience the various unpredictable shortages of materials that have occurred in previous years, leading to uncertainty in costs. In my personal opinion, price adjustments reflect our good planning for the supply chain to a certain extent. We expect what the vehicle cost will be approximately and then make such adjustments according to this expectation,” the executive said.
The Tesla VP also addressed the issue of some consumers in China who were upset that they bought vehicles before the recent round of price reductions took effect. So notable were the reactions of some consumers that protests were reportedly held in a number of Tesla stores.
“Maybe some consumers say that ‘I bought it yesterday, and you can’t suddenly change the cost overnight,’ but the fact is that no company calculates the cost every day, but rather calculates it on a time period. At the same time, the price of industrial products cannot be immediately reflected in the terminal products. Some raw materials may still be contracted a few months ago, so it actually has a certain lag.
“In addition, the price of a product is not only affected by its own cost, but also by the market demand and competition. If there is a change in the market demand or competition, it will also affect the price of the product. Therefore, the price adjustment of a product is not a simple matter. It is a comprehensive consideration of the enterprise’s own cost, market demand and competition,” the executive said.
Overall, the executive clarified that Tesla China’s price adjustments are not casual at all. Instead, they are done with a clear understanding of the company’s costs, demand in the market, and competitors. So far, however, Grace Tao noted that Tesla China has not had to change its strategy due to market demand or competition, which bodes well for the company’s footing in the country’s auto market. The executive also highlighted that after this recent round of price reductions, the cost of the domestically-produced Model 3 and Model Y should become more stable.
“In the past, Tesla has made several larger price adjustments due to external factors that have had an impact on costs. For example, when we became a domestic car(maker), the price naturally decreased compared to a pure import, at least the tariff was saved by 15%. For example, after our supply chain stabilized, it would definitely be lower than before when it was shipped from abroad. Tesla’s supply chain localization rate is now 95%, so theoretically, there is not much room for improvement. Therefore, I think after this price adjustment, the price should be relatively stable.
“Tesla’s logic is very simple. When the cost is calculated to have changed, such as changing raw materials, we will immediately increase or decrease the price. Actually, Tesla’s logic is very simple. Consumers seem to think that the price drop was relatively large compared to last month, but in fact, the price rose last month, and compared to the costs before the price increase, the difference is not large,” she said.
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Tesla Senior Vice President for Automotive Tom Zhu, a key executive behind the company’s success in China and Giga Texas, recently highlighted the “prime directive” of Full Self-Driving (FSD).
Zhu’s comments emphasize Tesla’s uncompromising focus on safety, which has made the company’s vehicles among the safest on the road.
Echoing Musk’s vision for safe autonomous driving
Zhu’s post quoted Musk’s statement from 2021, where the CEO reportedly stated that FSD must avoid accidents even if the most ridiculous events happened in the middle of the road. Zhu stated that beyond everything, Tesla’s systems like Autopilot and FSD are designed to keep passengers safe.
“Elon said it in 2021: “For self-driving, even if the road is painted completely wrong and a UFO lands in the middle of the road, the car still cannot crash and still needs to do the right thing. The prime directive for the autopilot system is: Don’t crash. That really overrides everything. No matter what the lines say or how the road is done, the thing that needs to happen is minimizing the probability of impact while getting you to your destination conveniently and comfortably,” Zhu stated.
“The prime directive, the absolute priority, is to minimize the probability of injury to yourself or to anyone on the road, to pedestrians, or anything like that. It can’t be dependent on the road markings being correct.”
Tesla leadership rallies behind global FSD rollout
Tom Zhu, who previously led Tesla China through its record-breaking growth phase, now oversees automotive operations worldwide. He has reportedly become a problem solver for Elon Musk over the years, with previous reports stating that he was brought in to help Giga Texas optimize its vehicle production ramp.
Zhu’s comments may sound ambitious, but FSD has proven that it values safety above all else over the years. This was highlighted recently in an incident in Australia, when a Model Y was hit by what could very well be a meteor. Despite the impact and part of its windshield melting, the vehicle was able to drive safely and keep its passengers safe.
Elon Musk
Elon Musk’s biggest tech rival just canceled his Tesla Roadster
“I really was excited for the car! And I understand delays. But 7.5 years has felt like a long time to wait,” Altman said.
Elon Musk’s biggest tech rival just canceled his reservation for a Tesla Roadster, the supercar the company has been developing for nearly eight years.
Sam Altman, the CEO of OpenAI, announced on X on Thursday evening that he canceled his Tesla Roadster reservation, or at least is trying to:
A tale in three acts: pic.twitter.com/ClRZBgT24g
— Sam Altman (@sama) October 30, 2025
Altman placed his Tesla Roadster reservation with a $50,000 deposit way back on July 11, 2018. However, he recently decided that he had waited long enough and decided to email the company to officially cancel the order.
“Hi, I’d like to cancel my reservation. Could you please refund me the $50k?” Altman emails to reservations@tesla.com.
He then received an immediate response, but not from Tesla. Instead, it was a bounce-back message from Google, stating that the message could not be delivered to the email because it was not active.
Altman then provided a reason for his cancellation, and it was not related to the intense rivalry he had with Elon Musk:
“I really was excited for the car! And I understand delays. But 7.5 years has felt like a long time to wait.”
I really was excited for the car! And I understand delays. But 7.5 years has felt like a long time to wait.
— Sam Altman (@sama) October 30, 2025
Altman and Musk have a lengthy history with one another that dates back to 2015, when OpenAI was created. The feud has resulted in lawsuits over breaching founding agreements by prioritizing profits.
Musk has been especially critical in recent years because of Altman’s decision to turn OpenAI into a for-profit business that he says is “built on a lie.”
This year, Musk offered over $97 billion to buy OpenAI, and a judge blocked his request to stop the company from being converted into a for-profit in March.
OpenAI then countersued Musk in April, while xAI, Musk’s company, sued OpenAI for allegedly stealing secrets through poached employees in September.
Elon Musk explains why xAI sued OpenAI over alleged trade secret theft
Regarding the Roadster, Tesla has been developing it for several years and has delayed its release for five consecutive years. The company says it will have a demo of what it has changed since it was unveiled in 2017 later this year, but no date has been set quite yet.
News
Neuralink’s first human patient reflects on 21 months with brain implant “Eve”
He credited Neuralink and Elon Musk for giving him “the opportunity to be the first,” as the experience has been life-changing.
Nolan Arbaugh, the first person to receive Neuralink’s brain implant, shared his 21-month update this week, reflecting on how far he’s come since his groundbreaking surgery.
Arbaugh, who became paralyzed after a diving accident, stated that his Neuralink implant, which he fondly calls “Eve,” continues to transform his daily life.
Arbaugh celebrates Neuralink’s progress
In his post on X, Arbaugh revealed that his hands-on involvement with Neuralink has decreased as more participants have joined the program. “The team might call me to test something once in a blue moon,” he wrote, adding that he’s happy to see others experience the technology’s full potential, from operating robotic arms to typing on keyboards with thought alone.
He credited Neuralink and Elon Musk for giving him “the opportunity to be the first,” as the experience has been life-changing. Despite a recent pressure sore that temporarily kept him bedridden, Arbaugh noted that he is still very optimistic, describing his journey as one of resilience, faith, and gratitude. He also teased “big news” coming for his two-year update in early 2026.
Studies and a growing public speaking career
These days, Arbaugh stated that he is focused on his studies in neuroscience, taking full-semester courses in chemistry, biology, and pre-calculus while earning top grades. He credited “Eve” for making school possible again, as his current academic workload would have been “impossible without Neuralink.” Arbaugh stated that he has also begun building a speaking business after delivering a paid talk at Fortune’s Brainstorm Tech conference.
“At the beginning of September I attended the Fortune Brainstorm Tech conference in Park City, Utah, as a paid speaker. That sentence seemed like an impossibility two years ago. But it’s just the beginning. My business is built, my legal is near complete, I’m surrounding myself with a team of amazing folks, and I plan on speaking once or twice a month in the same fashion beginning as soon as January.
“Conferences, interviews, podcasts—you name it, and I want to be there spreading the word about how amazing this technology is, the growth it’s experiencing, the possibilities of the future, and how it has so deeply affected my life,” Arbaugh stated.
Tesla top exec Tom Zhu highlights Elon Musk’s “prime directive” for FSD
Elon Musk’s biggest tech rival just canceled his Tesla Roadster
Neuralink’s first human patient reflects on 21 months with brain implant “Eve”
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