More Great News For Tesla China — MIIT Minister States No Cut In EV Subsidies In July

Overnight, Miao Wei, the Minister of Industry and Information Technology in China, announced at the EV100 forum in Beijing that new energy vehicle (NEV) subsidies will not be cut in July 2020, as many in the industry had feared.

Since full year sales of NEV vehicles fell from 1.3 million in 2018 to 1.2 million in 2019, it is thought that cutting back the subsidies again in 2020 would hurt the goal of accelerating the transition from gas cars to EV’s.

In July 2019, the Chinese government cut the subsidy for NEV vehicles from 50,000 yuan (about $7,200) to 25,000 yuan (about $3,600) for cars with over 400 kilometers of range (about 250 miles). In addition to the federal subsidy, there are several other incentives to buying an EV.

1. In several Chinese cities (like Beijing and Guangzhou), they use odd-even license plate road rationing to control air pollution. This encourages people to carpool with someone with a different license plate (or just buy two cars). They let BEVs (fully electric vehicles) drive every day.
2. In many cities, there is a lottery for new car registration and they give more registrations to EVs than to new gasoline cars.

3. There is a 10 percent sales tax on cars and EVs are exempt, and that exemption is expected to continue for at least another year.
4. As I wrote in this article, men use a car and especially a luxury car to attract a bride.
5. Plus, all the reasons people around the world like EVs (inexpensive to fuel and maintain, quiet and fun to drive, good for the environment) and Tesla vehicles in particular (unmatched safety, autonomy, and over-the-air updates).

This news will help ensure demand and pricing will be very strong in China in 2020, and so far, the Tesla Gigafactory 3 in Shanghai has an unbelievable record of construction and ramping of production to 1,000 cars a week with a demonstrated ability to build at a 3,000 a week rate. So, both demand and supply look to be strong for Model 3 and presumably also Model Y once it’s ready. Initially, only Model Ys imported from Fremont are available to order in China, at prices considerably higher than both the US and the Made-In-China Model 3. When Model Y is made locally in China, it is expected that the price will be significantly lower thanks to lower shipping costs, lower manufacturing costs, and possibly better incentives.

If you decide to order a Tesla, use a friend’s referral code to get 1,000 miles (1,609 km) of free Supercharging on a Tesla Model S, Model X, or Model 3 (you can’t use it on the Model Y or Cybertruck yet). Now good for $100 off on solar, too! If you don’t have any friends with a Tesla, use mine: https://ts.la/paul92237