U.S. electric carmaker Tesla Motors announced on Friday the price tag for its Model S in China, arguably the largest auto market in the world. The Model S with the 85 kWh battery costs 734,000 Yuan, or $121,300. Tesla Motors wants to get a piece of the growing luxury car industry in China and "advance the cause of electrical powered cars" worldwide.

"This pricing structure is something of a risk for Tesla, but we want to do the right thing for Chinese consumers," the company's statement said. "If we were to follow standard industry practice, we could get away with charging twice as much for the Model S in China as we do in the United States."

The cost would be the same as that in the United States at $81,070 if not for the inevitable taxation, customs and transport expenses. Tesla Motors' CEO Elon Musk believes that competitors will try to persuade Chinese customers that the lower price tag means the Model S is a smaller car when in reality they make double the profit per car in China compared to the U.S. or European countries.

Over the last couple of years, the Chinese government has tried to encourage the purchase of electric cars through subsidies and other means in an attempt to clean up the air quality, but weak sales suggest consumers may be hesitant to buy electric cars due to their shortcomings.

The company's current presence in China is small, says Forbes, "so it will have some work to do to get more on the radar of upper ending electric vehicle buyers there. This will include the need to expand beyond its one Beijing sales and service location, as well as building out a Supercharger network that will likely first go online between the nation's capital and Shanghai."