Tesla reveals China pricing for Model S with minimal markup, admits it ‘could charge more’

Tesla Motors has finally launched the Model S online design studio in China today and revealed its price: you’ll have to fork out CNY734,000 (about $121,000) for the Model S with the premium 85 kWh battery pack.

The pricing comes as somewhat of a surprise — after all, imported cars can typically retail at twice the price of US showroom cars, for example. In fact, pricing is such an issue that last year an automobile association in China started looking into the inflated prices of foreign cars in China.

However, the price of a Model S in China is essentially the same as its price in the US with the addition of taxes, customers duties and transportation costs.

In the US, the Model S with the 85 kWh battery pack costs $73,570 after factoring in $7,500 of federal tax credit — pinning the original price at $81,070. Tesla breaks down the China price as so: $81,070 US price with the addition of $3,600 shipping and handling costs, $19,900 customs duties and taxes, as well as $17,700 VAT.

Tesla notes that the pricing structure is “something of a risk” for the company as it could mean that some potential customers may look at it and “mistakenly think it must somehow mean the Model S has less value than its competitors.”

734k CNY is a big risk for Tesla. We know it’s unconventional. We know we could charge more. We know that our competitors will try to convince Chinese consumers that our relatively lower price tag means the Model S is a lesser car, when the real reason their car costs more is that they make double the profit per car in China compared to the United States or Europe.

However, Tesla says it took the risk because it wants to be fair to its customers, no matter where they live. It could be interpreted though as Tesla being extremely aggressive as it seeks to gain traction in the country. After all, earlier this month Diarmuid O’Connell, Tesla’s vice president of corporate and business development, said the company is “very anxious” to get broad distribution, and will expand “aggressively” in China.

Tesla previously revealed that it already has plans for a network of free charging stations in China, which would let owners of its electric cars travel long distances in the country, such as between major cities Beijing and Shanghai. 

It seems like the attractive price of the Model S, coupled with Tesla’s efforts to lay out a network for its electric cars to operate — a wide-reaching, convenient system by which its cars can travel wherever, quickly, and without the fear of running out of juice — the company is going all out to catch the attention of consumers in the world’s largest country.

Headline image via Justin Sullivan/Getty Images