China To Exclude Tesla Vehicles From 10% Purchase Tax

  • General
  • August 31, 2019
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  • 4 minutes read
Tesla CEO Elon Musk

Photo: Bret Hartman / TED

The Chinese Ministry of Industry and Information Technology (MIIT) has said that China will exclude Tesla’s electric cars from a 10% purchase tax that’s normally levied on car sales in the country. The tax exemption could decrease the cost of purchasing a Tesla by up to ¥99,000 (roughly $14,000), according to a post on Tesla’s official WeChat account.

No reason was given for the decision to exclude Tesla’s cars from the sales tax, but it happens to be at a time Tesla is expanding in China, with a new factory under construction and a recent visit by CEO Elon Musk, who debated with Alibaba CEO Jack Ma over the risks and potential rewards of artificial intelligence. Musk has also met with some of China’s senior leaders, including Vice President Wang Qishan and transportation minister, Li Xiaopeng.

Tesla currently sells 16 variants of its vehicles in China, according to a document posted on the MIIT website. All of such vehicles are exported from the U.S., but that’ll change when Tesla’s China factory begins rolling out vehicles. In a recent interview, Tesla Global Vice President Grace Tao noted that the Chinese facility, termed Gigafactory 3, was mostly complete. Several reports have also suggested that the Shanghai-based factory could begin producing vehicles as early as the end of September.

As of late, Tesla appears to have generating buzz in China with racing events, showroom parties and a collection of Chinese Tesla stickers for chat apps. It’s plausible Tesla is doing this in preparation for higher production rates in the country, which would happen with the presence of a local working factory.

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