Demand for Tesla Model 3 picks up in Japan after aggressive price cut
Demand of Tesla's mid-range electric sedan Model 3 has been picking up in Japan since the EV giant made aggressive cuts to its price last month. Rise in demand, has led to increased in delivery times for the vehicle which have now gone up to 12 to 16 weeks from the previous six to eight weeks, as per a report.
The report further stated that reservations for test drives have also become harder to get as wait times have now increased to more than three weeks instead of one week.
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Last month, Tesla cut the price of the long-range version of the Model 3 by 24% to 4.99 million yen ($46,700). Thus, making it accessible to consumers looking to buy low-end luxury vehicles. Japan, the world's third-largest car market, seeks to push the ban of sales of gasoline-only cars by the mid-2030s. This has given advantage to Tesla, especially after the price cuts. “This proves that EVs will sell if they’re cheaper," Takeshi Miyao, an analyst at consulting firm Carnorama in Tokyo, was quoted as saying by Bloomberg.
The Model 3 price cut was the first in Japan as Tesla plans to start importing vehicles into the country from its Shanghai factory instead of from the US. The EV maker's production capacity and the ability to procure battery supplies in China will give Japanese manufacturers a tough competition.
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Tesla has been selling its EVs in Japan for about six years and the company's CEO Elon Musk has called the country's auto market as one of the most important ones for the EV company. However, in 2020, Tesla sold less than 2,000 units in the country, up slightly from the prior year.
However, Tesla does lack the kind of recognition in Japan that is enjoyed by domestic automakers. As per a Nikkei Research poll from 2019, only 50% of 1,000 adults surveyed knew of Tesla compared to 98% who knew of Nissan. Also, EV passenger cars made up only 21,000 of the 5.2 million new vehicles registered in the country in that year, according to Japan’s Automobile Manufacturers Association.
(with inputs from Bloomberg)