Tesla fans in China can now take a test drive in a Model 3 made in Shanghai.
The first Chinese-made Tesla (TSLA) cars started arriving Friday in the company’s 49 experience centers in China, which offer customers information and the opportunity to take a test drive, the car maker said in a statement posted to its WeChat account. The Model 3 is also being showcased at an international car exhibition in the city of Guangzhou on Friday.
Made in the new Shanghai Gigafactory, the cars have a starting price of 355,800 yuan ($50,623), making them about 2% cheaper than an imported model. Customers can only buy the cars online, and Tesla has been taking orders since October 25.
The Shanghai factory was built in just 10 months and only began trial production last month. In a letter to shareholders, Tesla said the facility was about 65% cheaper to build than its Model 3 production plant in the United States.
CEO Elon Musk has described the factory, the first outside the United States, as the “template for future growth.” Last week, Musk announced Tesla would build another gigafactory in Berlin, a move that would take the great electric car race to the manufacturing heart of Europe.
In Shanghai, Tesla is targeting annual production of 150,000 units of the Model 3. It is reportedly sourcing batteries from Panasonic (PCRFF), as well as LG Chem and China’s CATL.
Tesla has high hopes for growth in China, the world’s largest electric car market.
“China is by far the largest market for mid-sized premium sedans. With the Model 3 priced on a par with gasoline powered mid-sized sedans, we believe China could become the biggest market for the Model 3,” the company said last month.
Local rivals usually have a price advantage over foreign brands, thanks to support from the Chinese government and subsidies to the electric car sector.
Making cars in China could allow Tesla to take advantage of some support. Buyers of some locally-made electric cars with a driving rage of more than 400 kilometers are eligible for a subsidy of 25,000 yuan ($3,555), according to new rules introduced earlier this year, meaning the Shanghai-made Model 3 could get even cheaper. Tesla’s Shanghai factory was added to the subsidy list last month, according to China’s Ministry of Industry and Information.
Meanwhile, it also reduces the fallout for Tesla from the US-China trade war. China has imposed a 15% tariff on cars imported from the United States.
Still, while the company has built momentum in China, success may not come easy. China’s car market has been in a slump since last year, and that decline has been exacerbated this year by the slowing global economy.