BEIJING/SHANGHAI: Tesla has started delivering Model 3 cars in China slightly ahead of schedule, as it looks to revive its sales that have been hit hard by Sino-US trade tensions.
The California-based firm has already adjusted prices and added a cheaper Model 3 variant to its line-up to make its US-made cars more affordable in China amid high import tariffs.
The US luxury electric vehicle said in a statement that it held a delivery event in Beijing on Friday which “marked a significant milestone for the market.”
It had initially projected a March start for Model 3 deliveries in China — the world’s biggest auto market where overall car sales contracted in 2018 for the first time in more than two decades.
The initial deliveries will go to customers who placed their orders before the end of 2018, Tesla said. Buyers that ordered this year will start receiving their cars from end-March.
“I see its earlier-than-expected delivery as an effort to try and seize the market as quickly as possible” amid mounting competition, said Alan Kang, an analyst at LMC Automotive.
“Many of its potential customers will not only be considering Tesla’s Model 3 but also other electric car models like Jaguar’s I-PACE or that from Audi and Mercedes-Benz,” the Shanghai-based analyst added.
While auto sales in China have waned as the economy slowed, Tesla’s business was hit hard after Beijing raised tariffs on US auto imports to 40 percent in July amid the trade tensions. China has since temporarily suspended the additional 25 percent tariff, reducing it to the 15 percent level.
Tesla currently imports all the cars it sells in China, but is in the process of building a factory in Shanghai that will manufacture Model 3 cars in the initial phase and help it minimize the impact of the trade war.
The United States and China are in the midst of talks aimed at resolving their trade dispute. If the two sides fail to reach an agreement by March 1, US tariffs on $200 billion worth of Chinese imports are set to spike to 25 percent from 10 percent.
Tit-for-tat tariffs between the world’s two top economies have upended international trade flows.
Tesla’s earlier-than-scheduled delivery, however, comes as the automaker was dealt a setback on Thursday after Consumer Reports, an influential US magazine, withdrew its endorsement for Model 3, citing reliability problems.
The magazine’s decision to withdraw its endorsement, less than nine months after recommending the electric sedan, raised questions about quality that Tesla has faced since the Model 3’s difficult launch.
Tesla rolls out Model 3 in China ahead of schedule in sales push
Tesla rolls out Model 3 in China ahead of schedule in sales push
- The initial deliveries will go to customers who placed their orders before the end of 2018
- Tesla currently imports all the cars it sells in China, but is in the process of building a factory in Shanghai
European gas prices soar almost 50% as Iran conflict halts Qatar LNG output
- Analysts warn prolonged disruption could push prices higher
- Some shipments of oil, LNG through Strait of Hormuz suspended
- Benchmark Asian LNG price up almost 39 percent
LONDON: Benchmark Dutch and British wholesale gas prices soared by almost 50 percent on Monday, after major liquefied natural gas exporter Qatar Energy said it had halted production due to attacks in the Middle East.
Qatar, soon to cement its role as the world’s second largest LNG exporter after the US, plays a major role in balancing both Asian and European markets’ demand of LNG.
Most tanker owners, oil majors and trading houses have suspended crude oil, fuel and liquefied natural gas shipments via the Strait of Hormuz, trade sources said, after Tehran warned ships against moving through the waterway.
Europe has increased imports of LNG over the past few years as it seeks to phase out Russian gas following Russia’s invasion of Ukraine.
Around 20 percent of the world’s LNG transits through the Strait of Hormuz and a prolonged suspension or full closure would increase global competition for other sources of the gas, driving up prices internationally.
“Disruptions to LNG flows would reignite competition between Asia and Europe for available cargoes,” said Massimo Di Odoardo, vice president, gas and LNG research at Wood Mackenzie.
The Dutch front-month contract at the TTF hub, seen as a benchmark price for Europe, was up €14.56 at €46.52 per megawatt hour, or around $15.92/mmBtu, by 12:55 p.m. GMT, ICE data showed.
Prices were already some 25 percent higher earlier in the day but extended gains after QatarEnergy’s production halt.
Benchmark Asian LNG prices jumped almost 39 percent on Monday morning with the S&P Global Energy Japan-Korea-Marker, widely used as an Asian LNG benchmark, at $15.068 per million British thermal units, Platts data showed.
“If LNG/gas markets start to price in an extended period of losses to Qatari LNG supply, TTF could potentially spike to 80-100 euros/MWh ($28-35/mmBtu),” Warren Patterson, head of commodities strategy at ING, said. The British April contract was up 40.83 pence at 119.40 pence per therm, ICE data showed.
Europe is also relying on LNG imports to help fill its gas storage sites which have been depleted over the winter and are currently around 30 percent full, the latest data from Gas Infrastructure Europe showed. In the European carbon market, the benchmark contract was down €1.10 at €69.17 a tonne
