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Clean Transport tesla-model-s-in-china (1)

Published on September 4th, 2014 | by Christopher DeMorro

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Chinese Automakers Get More EV Incentives

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September 4th, 2014 by  

tesla-model-s-in-china (1)

As was predicted, the Chinese government has made a big push to get drivers into electric vehicles. Cities like Beijing and Shenzhen are eliminating costly taxes on electric cars and installing EV charging stations at many public places, and these benefit both foreign and domestically-made electric cars.

But as Reuters reports, China is also making a push to protect its homemade auto industry with a new wave of EV incentives on 17 approved (mostly Chinese) models. This includes vehicles built by joint ventures between Chinese auto manufacturers and companies like Daimler, Nissan, and GM, and can help curb the often-heavy tax burden that many new cars are levied with.

Last month China also announced that all “new energy” vehicles would be exempt from the 10% national sales tax, which goes hand-in-hand with local and national incentives. For example in Beijing, EV and PHEV buyers can get over $9,700 off the cost of their car. These buyers are also exempt from the costly license plate lottery, which was instituted to stem the tide of new cars flooding China’s roads.

This latest round of EV incentives is especially beneficial for foreign companies that have invested in joint ventures in China. For example, the Denza EV is the work of the combined efforts of Daimler and BYD, and thanks to these and other benefits, the $59,000 Denza should see its price slashed to below $40,000 (or less!) when all is said and done.

Unfortunately companies like Tesla and BMW, which sell in China but haven’t developed joint ventures with domestic automakers, will miss out on these new incentives. While the 10% sales tax exemption applies to all EVs, regardless of where they’re built, those extra incentives could convince buyers to give their money to local brands instead of foreign entities. In a market that could easily see 20 million new cars sold per year in the coming decade, that could add up to a lot of lost incentives…and sales.

Perhaps that is why Elon Musk was so hot on the idea of eventually building a Tesla factory in China?

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About the Author

A writer and gearhead who loves all things automotive, from hybrids to HEMIs, can be found wrenching or writing- or esle, he's running, because he's one of those crazy people who gets enjoyment from running insane distances.



  • Will E

    next thing to the Gigafactory in the US, will be a gigafactory in China. seems logic to me.

    • No way

      There will be car factories in at least China and Europe before another Gigafactory is needed.

      • Will E

        it is not about the car, it is about the battery packs.
        The world needs no more car factories,
        needs a lot more giga factories for cheap battery packs. USA-Europe-China-India-South America.

        • Offgridman

          It might be possible that Tesla will cooperate with a Chinese manufacturer in the future on a lower priced mass market car especially considering the great demand in that market.
          You are right on the need for multiple battery factories though, especially considering that the demand will come from home and utility storage as well as EV’s. There is a clean, electric powered future that has finally started to begin. It is nice to be able to have some hope for the world that our children will live in.

        • Mint

          China (and to lesser extent India) are exploding in new car sales:
          http://online.wsj.com/news/articles/SB10001424052702303887804579503151993326852
          There most definitely is room for more car factories there.

          Europe? Not so sure.

          Battery factories on the scale of Tesla’s will come after they prove demand for 500k EVs per year. Other automakers have been burned plenty of times by poor predictions of future demand, and are thus very conservative. They’re going to follow, not lead.

        • No way

          Well, for Tesla it’s almost all about the car(s), in combination with cheap batteries and a super charger network.
          So if you look at them then the next step is more car factories.

          If you look at the world in general then of course battery capacity will be added and has been added. There are plenty of gigafactories already out there and there are a lot more to come from other companies.

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