Connect with us

Hi, what are you looking for?



Tesla Model 3 Buyers In China Can Rejoice Thanks To Sales Tax Exemption

China has announced that all Tesla automobiles will be exempt from the usual 10% new car purchase tax that applies to most other vehicles. Tesla’s warm embrace of China is paying dividends.

No one knows what is going to happen with the “easy to win” tariff war initiated by America’s putative president over a year ago, least of all him. What we do know, however, is that China has agreed to grant all Tesla vehicles an exemption from the 10% purchase tax that all new car buyers normally pay.

According to Reuters, the Ministry of Industry and Information Technology announced the exemption on August 30. The change marks an important concession amidst trade tensions with the United States. On  average, the exemption will lower the cost of buying a new Tesla by 99,000 yuan, or about $13,957, according to a post on Tesla’s social media WeChat account.

All 16 variants of the Tesla Model S, Model X, and Model 3 offered for sale to Chinese customers are listed in a document detailing the exemption on the MIIT website. No reason was given for the decision to exclude the cars from the tax, but it does come at a time when Tesla is expanding in China by building a new factory in the Free Trade Zone outside Shanghai.

Leading up to the start of production at that factory, Elon Musk has visited China several times. He has publicly praised China in the midst of tensions with the United States and thanked the Shanghai and national governments for their support.

Musk has met with senior leaders, including China’s Vice President Wang Qishan and the transportation minister. He has called national leaders “very thoughtful” and alluded to China’s “amazing” progress in sustainable energy, transport, and space exploration. “This year they did more orbital launches than the USA for the first time,” Musk tweeted last December.

Craig Irwin, an analyst for Roth Capital, tells Reuters, “It is pretty clear Tesla is committed to China, with the investment in the Shanghai Gigafactory. Those relationships probably helped Tesla lobby for a successful exemption from the tax. Now we need to closely watch the build out of the Shanghai Gigafactory and Model 3 volume ramp in China.”

While Tesla does not disclose sales by country, consulting firm LMC Automotive estimates the company sold 23,678 cars in China in the first seven months of this year, which is nearly double the number it sold in 2018.

Also on Friday, Tesla announced it is raising the price of the cars it sells in China by 2% to offset the weakening of the yuan in recent weeks. The long range dual motor Model 3 is now 439,900 yuan ($61,467), up from 429,900 yuan ($60,070) previously. But the net effect is that, after the purchase tax exemption, Tesla will cost a Chinese customer considerably less to buy this week than it did last week. Tesla stock was up 4% following the exemption announcement.

Tesla is clearly betting heavily on China, which only makes sense since its new car market is the largest in the world and its electric car market accounts for approximately half of global electric car sales. It’s true that sales are not quite as robust this year as they have been in previous years, but there will still be more than 22 million new cars sold in China this year, even in a down market, with perhaps 8% of those being plug-in car sales.

With its close ties to the national and local governments, Tesla should be well positioned to sell as many cars in China as it can manufacture. We’ll keep you informed via our regular China EV sales reports.

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.

Autonomous Drones for Better Farming

I don't like paywalls. You don't like paywalls. Who likes paywalls? Here at CleanTechnica, we implemented a limited paywall for a while, but it always felt wrong — and it was always tough to decide what we should put behind there. In theory, your most exclusive and best content goes behind a paywall. But then fewer people read it! We just don't like paywalls, and so we've decided to ditch ours. Unfortunately, the media business is still a tough, cut-throat business with tiny margins. It's a never-ending Olympic challenge to stay above water or even perhaps — gasp — grow. So ...
If you like what we do and want to support us, please chip in a bit monthly via PayPal or Patreon to help our team do what we do! Thank you!
Written By

Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. He is proud to be "woke" and doesn't really give a damn why the glass broke. He believes passionately in what Socrates said 3000 years ago: "The secret to change is to focus all of your energy not on fighting the old but on building the new."


You May Also Like

Clean Transport

Elon Musk spent much of last year selling off Tesla stock, though he remains the company’s largest individual stakeholder. However, despite a disdain for...


When is a battery component a battery material? When the Treasury department says it is and that may lead to some drama on Capitol...

Climate Change

Steel will not remotely be a constraint for global transformation of energy over the coming decades. We make vastly more of it per year...

Copyright © 2023 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.