Tesla (NASDAQ:TSLA) is poised to begin mass production of the electric vehicle giant’s updated Model 3 in China as early as next month, according to people familiar with the situation.
Sources, who opted to remain anonymous as the details are not yet public, have revealed that Tesla is nearing the completion of display vehicle manufacturing. These vehicles are slated to be dispatched to Tesla showrooms in the latter part of August with mass production following soon after. Output will ramp up through China’s National Day holiday, which starts Sept. 30, the people added.
The four-door sedan made its debut back in 2017 and quickly gained immense popularity not only within the United States but also across China and Europe. However, it gradually lost its competitive edge in China, which happens to be the largest car market worldwide. This was particularly evident following the emergence of electric vehicle offerings from local contenders like BYD Co (SZ:002594) and XPeng Inc (NYSE:XPEV).
Just a few days ago, Tesla reduced prices on a number of its models in China as a way to stimulate sales. This move sparked concerns that the company might initiate a new round of price competition. Furthermore, Tesla decided to extend an insurance subsidy of 8,000 yuan (equivalent to $1,100) for the base version of the Model 3 sedan. This subsidy will remain in effect through the end of next month.
Shares of TSLA are up 0.37% in premarket trading on Thursday.