Tesla announces China price for cars: $121,000 versus $81,000 in United States

BEIJING—Tesla Motors announced a $121,000 sticker price for its Model S electric sedan in China, and called the relatively low cost for the Chinese market a “big risk” because some buyers might think the car is lower quality.

The fledgling U.S. automaker said Thursday it will add only unavoidable taxes and shipping charges to its U.S. price of $81,000.

High-end cars tend to be vastly more expensive in China than Western countries because of taxes and their prized foreign cachet allowing automakers to push the limits of what they can charge.

Tesla wants to treat Chinese buyers “just as well as we’d treat customers in any other country,” the company said on its website. It said it was willing to take a “big risk” that customers might think its cars were lower quality than higher-priced competitors.

China is the world’s biggest auto market by number of vehicles sold. Global automakers are looking to it to drive revenues as sales growth elsewhere flattens out.

Most major auto brands have set up production in China in response to high import duties. Renault became the latest to do so in December, announcing it will open its first China factory.

Manufacturers of electric cars have been reluctant to shift production to China because of government pressure on them to hand over technology to local partners in order to be treated as domestically made vehicles.

“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 U.S.,” said Tesla on its website.

“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.

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The company said it plans to build a nationwide network of charging stations.