1) So, it's clear. $TSLA's China factory (GF3) must churn out 12,500 Model 3s per month fairly soon. The CCP realizes what most $TSLA investors don't: at the current price of $43K, the MIC M3 won't see enough demand. So it appears like the CCP is eyeing $36K to "move the metal". 
2) If the MIC M3 does come down to 36K at retail, the actual factory price will be $31K pre-VAT of 13%. This is exactly what I've modeled for Q4 2020, which would result in a -$226m loss at GF3 at full production *if* the RMB/$ rate stays at current favorable levels of RMB 6.9/$.
3) If the RMB weakens to 2019's low of 7.2, losses widen by 10% as much of the MIC M3 will still be relying on parts from the US. Higher USD vs RMB stings.
But this bit of news from China's Xinhua (the CCP's official mouthpiece) implies that the Model 3 just isn't selling well.
But this bit of news from China's Xinhua (the CCP's official mouthpiece) implies that the Model 3 just isn't selling well.
4) From the first big shipment of the Model 3 in China last March, avg monthly sales are only 3.2K units at a $51K price tag. $TSLA lowered the price by 9% & got a $3.6K "EV incentive", so now it's $43K. This prompted protests among customers who recently bought at higher prices.
5) I'll bet that even at $43K, M3 orders have not increased. The CCP likely knows this, prompting the comment of $36K by CPCA's secretary-general in Xinhua. In fact, order cancelations by customers expecting a price drop likely prompted the CCP to push for a deeper M3 price cut.
6) What the CCP is seeing is very simple: $TSLA signed an agreement to churn out 12K cars/month. But M3's sales are only 3K/month. Only 1 thing you can do for Chinese workers & local suppliers: Lower the px to create 12K/month in demand. $36K is the 1st try of many more to come.
7) The CCP is starting to get nervous about whether it will get a return on its investment in $TSLA. State-owned banks extended $1.6bn in loans at low rates; suppliers have boosted capacity, etc. They'll all need diapers once they see GF3's losses, which should be -$740m in 2020.
