Tesla is getting another leg up in China, as the Ministry of Industry and Information Technology (MIIT) dropped news on its website today that it would grant a purchase tax exemption to all of Tesla’s vehicles sold in the country.
Combined with the localization of Tesla Model 3 production this year and Model Y production next year, helping Tesla to avoid import duties and completely give the White House the finger, Tesla must be feeling bullish about China. This news is just the latest in a series of wins for Tesla in the world’s largest automotive market.
— Jay in Shanghai 🇨🇳 (@JayinShanghai) August 30, 2019
Getting a pass on the purchase tax translates to a savings of 10% off the top of the out-the-door purchase price of a Tesla. That means savings of up to 99,000 yuan ($13,960) according to a post on Tesla’s official WeChat account.
The exemption applies to all 16 vehicle configurations Tesla currently sells in the country, according to official MIIT documents.
This is sure to give Tesla a boost in sales in the country as excitement builds for the first Made In China Tesla Model 3s, which are expected this year from the soon-to-be-completed Tesla Gigafactory 3 in Shanghai, China.
Tesla’s Chinese revenue climbed 42% to $1.5 billion in the first half of 2019, amounting to 13.5% of total company revenue. Where will it be in the second half of the year, and the first half of 2020?
The construction of Tesla Gigafactory 3 has proven to be a source of great national pride for China. Locals continue to flock to the location to fly drones over it, take pictures next to it, and get into the virtual line for the first of the Made In China Tesla Model 3s that will start rolling out the door later this year.
Tesla expects to produce 250,000 Tesla Model 3 and Model Y vehicles in China. Though, it is not hard to imagine that climbing as new models are added.
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