Tesla Lowers Cost Of Model 3 Sedan By 8%

U.S. electric car maker Tesla (NASDAQ:TSLA) has lowered the starting price of its Chinese-made Model 3 sedans by about 8% to $36,805 U.S.

Previously, the starting price for Model 3 sedans made in Tesla’s Shanghai factory with a standard driving range was about $40,000 U.S. after various subsidies.

Standard range Model 3 sedans will now come with lithium iron phosphate batteries that are cheaper than the nickel-cobalt-manganese batteries used previously. Tesla Chief Executive Officer Elon Musk has tweeted his intent to reduce his company’s reliance on cobalt in Tesla's batteries and said that the next generation of batteries "will use none."

Tesla started to deliver cars from its Shanghai factory last December, helping it save on shipping costs and tariffs for imported models of the electric vehicle. Tesla sold more than 11,000 vehicles, mostly Model 3 sedans, in August in China, the world’s biggest car market.

Tesla is also building new car manufacturing capacity for its Model Y sports-utility vehicles in Shanghai and expects to start delivering them from next year.