A Fair Price

Today we're launching the Model S online design studio in China and announcing the price of the car. For Chinese customers, the price of the Model S with the premium 85 kWh battery pack is 734k CNY.

This pricing structure is something of a risk for Tesla, but we want to do the right thing for Chinese consumers. If we were to follow standard industry practice, we could get away with charging twice as much for the Model S in China as we do in the US. But we're doing things differently, even if it means that some people might look at the price and mistakenly think it must somehow mean the Model S has less value than its competitors.

Given that the Model S won the 2013 Motor Trend Car of the Year award, received the highest rating of any automobile in history from Consumer Reports (99 out of 100) and achieved the best possible US National Highway Traffic Safety Administration rating, that is certainly not the case.

Instead, the price of a Model S in China is much lower than its competitors simply because we want to treat our Chinese customers just as well as we'd treat customers in any other country. That means the price of a Model S in China is the same as the price of a Model S in the US, adding only unavoidable taxes, customs duties and transportation costs. We're not even factoring in the cost of the free-to-use Supercharger network that Tesla will build across China.

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.

But we decided to take a chance anyway.

We care about fairness, and we care about transparency. We care about advancing the cause of electric cars in China. And we care about doing the right thing for our customers – no matter where they live.

- The Tesla Motors Team

Below is the exact math for 734k CNY: