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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.
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“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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SpaceX just picked up another $1.6 billion from the Pentagon, with the U.S. Space Force awarding two task orders worth $1.6 billion to fly 18 Falcon 9 missions from Vandenberg Space Force Base in California through the end of 2027. The launches will carry satellites for the Space Based Sensing and Targeting portfolio, a set of programs meant to help the military detect and track airborne threats and relay that information across forces in near real time.
The award falls under National Security Space Launch Phase 3 Lane 1, the Space Force’s faster, commercial style procurement track for missions that do not require the military’s most demanding certification process. It is also the largest single order publicly disclosed under that program so far, and the first task order issued since the Space Force nearly tripled Lane 1’s contract ceiling from $5.6 billion to $17 billion on July 17.
SpaceX to become America’s Military data backbone for missiles, drones, and warfighters
Eric Zarybnisky, the Space Force’s acting portfolio acquisition executive for space access, said the entire process, from identifying the requirement to signing the contract, took about two months, including a month set aside for companies to prepare proposals.
SpaceX is not just launching these satellites. It already holds the contracts to build two of the programs within the same portfolio, $4.16 billion for the Space Based Airborne Moving Target Indicator system and $2.29 billion for the Space Data Network Backbone, which Teslarati covered in May. That means SpaceX is now responsible for both building key pieces of the military’s next generation sensing network and getting them into orbit.
With this latest award, SpaceX’s Pentagon contract total for 2026 alone tops $8 billion, adding to a defense portfolio that already includes the Golden Dome missile defense software group SpaceX joined in April and a string of GPS launches it inherited after ULA’s Vulcan rocket ran into a booster anomaly, which we detailed in March.
Lane 1’s vendor pool technically includes seven companies: SpaceX, ULA, Blue Origin, Rocket Lab, Stoke Space, Impulse Space, and Relativity Space. In practice, SpaceX remains the only provider with the combination of launch cadence, flight proven Falcon 9 hardware, and West Coast infrastructure to support a campaign requiring roughly one Vandenberg launch a month for the next year and a half.
Some lawmakers have flagged the growing concentration of national security launches with one company as a risk worth watching. For now, the Space Force keeps backing SpaceX, with it being the company that shows up ready to launch.
Elon Musk shed two new bits of detail on Starship following its 13th test launch, which was an overwhelming success.
SpaceX launched Starship for the 13th time last Friday after two delays: one on Monday when several Raptor engines did not ignite, and another on Thursday due to unfavorable weather conditions in Starbase, Texas.
The launch was overwhelmingly successful. SpaceX was able to complete a necessary test of the heat shield tiles by increasing the acceleration of Starship from launch throughout the flight; 20 Starlink v3 satellites were released with no issue; the Super Heavy Booster landed safely in the Gulf of America, Ship successfully reignited engines while in space; and it also splashed down without incident in the Indian Ocean.
SpaceX Starship just nailed something it’s never done before
Nevertheless, more details are coming out about Starship, and Musk is doing the talking.
Starship Will Be Retrieved in the Ocean
Musk revealed on Tuesday night that Starship would be recovered by a ship in the Indian Ocean. SpaceX routinely tries to recover Starship after splashdown in an effort to find out more about the flight by examining the spacecraft afterward.
We’re sending a ship out to recover Starship https://t.co/fUqUZTITO9
— Elon Musk (@elonmusk) July 28, 2026
This helps engineers find out more about why things might have happened, allows them to examine any potential damage or anomalies that might have occurred, and increases the chances of an even more successful flight next time thanks to the additional information recovered.
Ship Could Have Been Caught by Tower Arms, Musk claims
Musk has already indicated that SpaceX will plan to attempt a catch of Starship with the 14th test flight. While this would be a major accomplishment, it would be an expected next step, considering the fact that the Super Heavy Booster has already been caught by the chopsticks on numerous occasions.
The ship landing was precise, meaning that it would have been caught by the tower arms https://t.co/6nbNrRfX9P
— Elon Musk (@elonmusk) July 29, 2026
A ship catch would be a great indication of where SpaceX stands in terms of reusability and launch cadence. A successful catch with relatively no incidents would be a good sign that SpaceX is nearing a more frequent launch of Starship, but also that the reusability of the massive rocket would be something many would expect in the near future.
It is a necessity to make life multiplanetary.
Elon Musk has updated his timeline for when humans will walk on Mars and for when ships will simply get there.
The objective of getting to Mars has been one of Musk’s biggest goals since becoming a serial entrepreneur and realizing that time on Earth is limited. Musk has said several times he hopes to die on Mars, and not by impact.
Musk now believes that people will be on Mars in “roughly 5 to 7 years.” He said that a Mars lander will get there “a few years sooner.”
People on Mars in roughly 5 to 7 years.
Mars lander a few years sooner.
— Elon Musk (@elonmusk) July 29, 2026
The response from Musk comes after NASA Administrator Jared Isaacman said that SpaceX’s biggest priority is the Moon and not Mars. Because of this, Isaacman conceded that he believes nuclear power and propulsion investments will provide “potentially the pathway with the fewest miracles required to put four people on Mars in the next 10 to 15 years.”
Of course, this is what NASA can do through taxpayer funding and nuclear investments, he added.
Musk’s grand ambitions are much more optimistic than most, and it is certainly a double-edged sword. This is not the first time timelines for Mars have been somewhat lofty, especially to those normal thinkers like you and me, not super geniuses like Musk.
In fact, the SpaceX and Tesla frontman has said on at least a dozen occasions that we could be on Mars in the coming years. Musk said 2020 would be the big year as early as 2009. In 2020, he was “highly confident” of a landing in 2026, and had even said 2024 in a best-case scenario.
The point is, the range has varied, and it’s anyone’s guess when we’ll get there. This latest adjustment to the timeline is typical of Musk, and while the Moon has seemingly taken priority over Mars, it is still worth mentioning that the ultimate goal is to make life multiplanetary, and it starts potentially with the Red Planet.
SpaceX scores another massive Pentagon deal to support military satellites
Elon Musk sheds two new bits of detail on Starship after 13th test launch
