Tesla (TSLA) Could Have Charged Double for the Model S in China

While Tesla Motors' (Nasdaq: TSLA) Model S is priced at $121,000 for the China market (including taxes and shipping), how much more could the company have charged?

Apparently, a lot more.

Engadget observed Thursday that BMW's 650i, which has a sticker price of $87,000 in the U.S., sells for a whopping $326,000 in China. How does that work? WantChinaTimes said imported vehicles into China are subject to a 25 percent tax on the basis of CIF (cost, insurance and freight) prices, 17 percent value-added tax and a consumption tax ranging from 1 percent-40 percent according to the engine size, with models with a engine being subject to the highest 40 percent rate. That means an auto with an engine of 4.0-liters or larger and CIF price of $163,000 would have an additional $233,000 of taxes added on.

Tesla's electric vehicle might have an advantage given that China may not have put in place a similar pricing structure for electric engine sizes.

While Tesla might have been able to charge double, given that its still in its infant stages, the smart move is to keep initial costs down and potential look to build a manufacturing center in China for bolster future sales.

Shares of Tesla are about 1.7 percent lower Thursday.

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