On Wednesday, (TSLA) announced that when its Model S goes on sale in China, pricing will start at 734,000 Chinese yuan, about $121,000.

Tesla is apparently launching only the larger battery sedan model in China. In the U.S., the same car would start at $81,070. Tesla attributed the additional $40,000 on the car’s Chinese price tag to the cost of shipping the car to China, including import duties and taxes, Forbes notes.

In a statement announcing the pricing, Tesla said that it could “get get away with charging twice as much for the Model S in China as we do in the US.” It also conceded that by keeping the price relatively low, compared to competing imported luxury vehicles, it risk denting the models appeal to status-conscious Chinese consumers.

By contrast, the Chinese pricing for the Mercedes S-Class starts around 1.25 million yuan. Tesla still has only one location in Beijing, handing both sales and service. It is hoping the pricing strategy will attract early adopters and build market share.

TSLA stock fell almost 2% in Thursday morning trading. TLSA stock has more than tripled over the past year, but TSLA stock has fluctuated wildly in price after a series of fires in its Model S vehicles prompted a government investigation.

TSLA stock is currently trading above $174 a share.