Tesla's competition for the Model Y is growing quickly in China

Andrew Cummings
December 26, 2018

The second announcement that led to a free falling Tesla stock came directly from Elon Musk, via his favoured mode of every announcement - Twitter.

As indicated by the California-based electric carmaker's Chinese site, costs of certain Model 3 vehicles were sliced by up to 7.6 percent. In his appearance at the Recode Decode podcast, for example, Musk noted that he believes Tesla can remain cash-flow positive mainly by selling its vehicles like the Model 3.

Apart from the Model 3's strong demand in 2019 and beyond, Ives also highlighted that deliveries to Europe - a region that likely has a pent-up demand for the vehicle - appear to be on schedule.

Tesla will reveal its fifth vehicle, the Model Y in March of 2019.

All the same, Tesla's Autopilot feature has improved considerably over the past few years. It has acquired intensely in idea structures from Tesla's Model X.

The Model 3 sedan has not been sold in the market so far, but Tesla has started taking orders through online bookings with a deposit of 8,000 yuan.

Tesla said it would invest up to US$6 billion over the next two years. Images taken of these Superchargers indicate that they are marked specifically as "Model 3 Priority" stalls. Tesla cars are now sold in China but those manufactured in the U.S. will face tariffs that could make them more expensive than any Chinese competitors. Backed byFoxconnandAlibaba, and valued at around $3 billion, Xiaopeng, or Xpeng, has gained some notoriety in the run-up to the release of its first auto because its concept designs borrowed heavily from Tesla's Model X.

In a recent note to investors obtained by CNBC, Wedbush Securities analyst Dan Ives has predicted that demand for Tesla's Model 3 sedan "looks very strong into 2019 and beyond", something that could reduce the risk for the electric auto maker needing to raise capital again in the near future.

As of writing, Tesla shares are trading up +.53% at $296.95.

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