Tesla China has announced it has started taking orders for its made-in-China Model Y battery-powered passenger car ahead of commercial production which is scheduled to start next year.

The US electric vehicle manufacturer began operating its newly-built plant, the Gigafactory 3, in Shanghai at the end of last year – which now produces the Model 3. Lower costs and taxes have allowed the company to cut prices significantly compared with the imported models, fuelling local demand.

The company has made available two variants of Model Y for pre-order, priced at CNY488,000 (US$70,930) and CNY535,000 (US$77,760), which the company says is just an estimate until final prices are confirmed.

Tesla sold around 50,000 cars in China in the first half of 2020, mostly Model 3s, generating revenues of US$2.3bn- or just over 19% of the company's US$12.02bn global sales.

Second-quarter sales amounted to 31,000 units, according to retail data released by the China Passenger Car Association (CPCA), equivalent to more than one-third of the company's 90,000 global deliveries.

China could account for around 40% of Tesla's global sales by 2022, according to Wedbush Securities analyst Dan Ives, once its local plant is fully operational. He added that the company is on track to sell 500,000 units globally in 2020 and that this could rise to one million units by 2023.