Tesla (TSLA.O) on Friday unveiled a restyled Model 3 with a more extended driving range in China and other markets, including Europe, the Middle East, Australia, and Japan. The refreshed Model 3, dubbed ‘Project Highland,’ also boasts more aerodynamic improvements. Its starting price is 12% higher than the previous, base rear-wheel drive model, reversing a trend toward price cuts, which had sparked concerns about the company’s financial health and price wars with rivals.
The refreshed Model 3 boasts a 310-mile (499-kilometer) battery and is expected to cost around $15,000 more than the previous version. The car can be driven for over a week on one charge and can also charge at home or at one of the 45,000 Tesla Superchargers worldwide. It is designed to help drivers reduce their gasoline dependence and reduce the emissions contributing to climate change.
Tesla believes the updated Model 3 will be the most cost-efficient vehicle. Its new high-speed charging port enables the car to be charged up in less than half an hour, and it can be plugged into a level-two charger at a public station for a full charge within four hours. Its battery and electric drive system have an eight-year warranty.
Despite the impressive new features, Tesla has made several other changes to its entry-level Model 3, which will help it remain more affordable. It has redesigned the interior to be more spacious and simpler to operate, and it has switched from a lithium iron phosphate battery to a lithium manganese iron phosphate battery for the Model 3 LR, reducing the cost by about $3,000 per unit.
It has also changed its warranty to include corrosion coverage on the car’s electric motor, battery, and inverter. This is a big deal, as it will allow buyers to cover the cost of repairs and maintenance over their entire ownership period rather than paying for the replacement parts out of pocket.
While the refreshed Model 3 is a step in the right direction, it is far from the fully self-driving Tesla that Musk and his team are shooting for. That car is expected to be launched in 2024 and could compete with established vehicles. One is the Ford Mustang Mach E, a mid-sized sedan offering a similar driving experience for about $18,000 after tax credits.
The restyled Model 3 will likely face increased competition in the coming months as rivals announce their plans to build long-range electric cars. In China, a leading EV maker, Xpeng, announced that its forthcoming P7 will have a driving range of 706 kilometers (462 miles) on the NEDC test cycle. That will considerably improve the 220-mile (354-kilometer) rating of the entry-level Model 3.
Xpeng, which Chinese state-owned investors back, is focusing on commercial and retail sales. It hopes to attract business customers by offering a 100% year-one deduction on its prices for the vehicles, as well as a wide range of incentives such as free charging and the ability to update its software over the air.
