Toyota bZ3, Finally Ready to Pre-Order in China, It's 20% Cheaper Than the Tesla Model 3

As you know, Tesla is ravaging the electric car market. Not because of its EV market share of about two-thirds globally, nor due to selling more than 4 million units until now. The headache for all other carmakers out there is Tesla’s massive discounts. Some named it a ‘price war’.

At the beginning of 2023, Tesla slashed prices globally by up to 20% for Model 3 and Model Y. More recently, Model S was cut by 5% and Model X by 10%. Orders went frenzy, while the other car companies are preparing similar discounts to keep up the pace.

So, the cheapest Tesla Model 3 in the U.S. is now $35,500 (€33,600) when factoring in the $7,500 (7,100) IRA subsidy. That’s almost $12,000 (€11,300) less than the average price for new cars in the United States!

But, as you already know, Tesla Model 3 is also manufactured in China, where the prices were slashed by up to 14%. Some owners, who bought their cars just before discounts came in, were protesting in some places and requesting compensation. Not the best publicity for a carmaker.

So, in China, the most affordable Tesla Model 3 is now 229,900 yuan, which is about $33,500 (€31,700). This value is $2,000 (€1,900) lower than the American-built sibling, or 5.6% less. That’s really an affordable price for a premium vehicle, and the Chinese love this.

Now it’s time for the empire, I mean Toyota to strike back. After years and years of defying the EV trend, the world’s biggest carmaker is now all in the EV game. In China, Toyota partnered with local car manufacturer FAW.

The first EV they made for the local market was the all-electric variant of the popular hybrid compact crossover C-HR. Then it was time for the bZ4X SUV to be manufactured in China, but this second EV had bad luck following bad publicity after global recall for the hilarious “the wheels could fall!” issue.

Because its sales didn’t meet expectations, it was discounted by 15%. So, the bZ4X is now priced at just 169,800 yuan, which is less than $25,000 (€23,700). Compare this to the $42,000 (€39,800) price sticker in the U.S. or better, to the 225,800-yuan price of the all-electric C-HR, which is almost $32,500 (€30,800), more expensive than the more practical bZ4X.

But wait, the third Toyota EV is now ready to rock in China. The bZ3 sedan is using the same e-TNGA architecture as the bZ4X SUV and, on March 6, it went on sale starting from 189,800 yuan, which is $27,400 (€26,000).

It’s more expensive than the bZ4X SUV by 20,000 yuan (more than $2,800 or €2,600), which might seem odd. But keep in mind that the bZ3’s motor, electric control system, and battery pack are from BYD. More important, BYD’s ‘blade battery’ promises a better range than the lithium-ion similar-capacity pack in the bZ4X SUV.

For instance, the range for the 49.9 kWh pack in the bZ3 is 320 miles (517 km), while the entry-level 50.3 kWh pack in the 2WD variant of bZ4X offers just 249 miles (400 km). Of course, one could argue that the bZ3 is more aerodynamic than the SUV. But the difference is much higher than between Model 3 and Model X, for instance.

The bigger 65.2 kWh pack is promising a 382 miles (616 km) range for the bZ3, while the 66.7 kWh battery of the AWD variant of bZ4X is credited with a maximum of 348 miles (560 km) range. But you have to keep in mind that these are very optimistic estimates under the China light-duty vehicle test cycle.

We’re not done yet, because the bZ3 has some aces up its sleeve. The first 5,000 customers who booked it online for 2,000 yuan ($290 or €275) qualified for a discount of 5,000 yuan ($725 or €687). This means the first 5,000 customers must pay a base price of 184,900 yuan, which is $26,600 (€25,200).

Then, the customers who already have a car from FAW-Toyota are eligible for 6,000 yuan ($870 or €825) purchase subsidy. If they trade in their old car, the subsidy is raised to 8,000 yuan ($1,160 or €1,100). So, the Toyota bZ3’s lowest price is 176,800 yuan ($25,400 or €24,100).

Add to this the convenience package of free maintenance for ten years or 124,000 miles (200,000 km) and 24-hour free road assistance. Oh, and a free-charging program, which mirrors the one Tesla offered in the first years to its early-adopters customers.

So, how does this new Toyota compare to Model 3? The most affordable Tesla Model 3 built in China has a 55 kWh LFP battery pack with a CLTC range of 345 miles (556 km). This is only 7% more range than the base variant of the Toyota bZ3, but the Model 3 is up to 23% more expensive.

Of course, Tesla is a premium brand, but bZ3 is far from what you would expect from a Corolla. It promises a level of luxury and high-tech features close to Model 3. On performance size, the base Model 3 is a clear winner, but the bZ3 is catching up with a roomier interior.

Toyota already started production of the bZ3 in the FAW-Toyota New Energy Plant, which has an annual capacity of 200,000 cars. And you can bet Toyota will do whatever it takes to manufacture as many bZ3 as it can because it’s in a hurry.

In the summer of 2023, China will implement the most stringent emission standard to date in the world. Like the Euro 7 in Europe, it basically forces car manufacturers to shift to zero-emissions vehicles. Toyota lags because its bet on hybrids and fuel-cell cars is not enough, so it must produce and sell a lot of electric vehicles in a short time in China.

For now, the bZ3 seems like a good deal compared to Tesla Model 3, but it’s also going to face a lot of competition from other Chinese EV manufacturers. For now, there are no plans to build and sell this new model outside China. It must first prove itself for Toyota and BYD to decide to ramp up production.

But, if it will succeed, it will mark another slash in prices from the competition, especially Tesla. Toyota’s officials know too well they are very late to the EV party, so it’s a matter of pride to try to close the gap as soon as possible.

Don’t be surprised if, in a couple of years, Toyota bZ3 will be manufactured on American soil. The IRA is the strongest point for a company like Toyota to force itself into adapting to strong trends. But for now, let’s see if the bZ3 will avoid the technical issues of its SUV brother. The Japanese must have learned a harsh lesson by now.