The Chinese government gave another “gift” to Tesla, a U.S. electric vehicle company. Tesla has been aggressively investing heavily in China for its vehicles despite the U.S.-China trade war.
China’s Ministry of Industry and Information announced on the 30th of last month a list of new energy vehicles subject to exemption from the acquisition tax on vehicles, including all Tesla models such as Model 3 and Model S.
This means that those who buy Tesla vehicles in China will not have to pay acquisition taxes equivalent to 10 percent.
Tesla said in its official WeChat account that the move will save up to RMB 99,000 for customers who buy its vehicles in the future. The Chinese government’s tax exemption on acquisition of new energy vehicles was mostly targeted at its vehicles. Therefore, Tesla can now be more advantageous in targeting the Chinese market.
How this “favor” for Tesla vehicles possible
The Chinese government is actively supporting Tesla, which has invested heavily in China despite the U.S.-China trade war
Tesla has been constructing Tesla’s Giga Factory (Tesla’s electric vehicle and parts plant) in Linkang Industrial District in Shanghai since January.
The plant plans to produce up to 500,000 electric vehicles, including the Model 3. Where the company will invest a total of RMB 50 billion. Production is scheduled to begin in part at the end of this year.
Recently, some analyzed that the Shanghai Free Trade Zone nearly doubled. That’s why the government gave Tesla a “gift,” including additional tax cuts. As well as at the Lin River area where Tesla factories are.
Tesla is betting heavily on the Chinese market, the world’s largest EV market.
Amid the intensifying U.S.-China trade war, China set to impose an additional 35 percent tariff on U.S. cars in addition to trade tariffs. Therefore, it is practically impossible to target the Chinese market with cars produced in the U.S.
Tesla is currently not unveiling the number of vehicle sales in the Chinese market, according to Reuters. However, industry sources estimate Tesla’s sales in China from January to July this year at 23,678 units.
