The Chinese government has added Tesla’s electric cars to the list of vehicles exempt from sales tax. Actually, only cars produced in China are exempt from the ten per cent sales tax.
With the construction of the plant in Shanghai, Tesla is apparently also granted this privilege – despite the ongoing trade disputes between the USA and China. According to a statement by the Ministry of Industry and Information Technology, the tax exemption applies not only to the Model 3, which will be produced in China in the future, but to all electric cars sold by Tesla in China, including the Model S and Model X imported from the USA. The reasons for the decision are not given in the announcement, but the Shanghai plant and the associated investment are considered a good argument for Tesla.
According to Tesla, the huge electrical market in China is one of the largest growth markets. As a reaction to the tax exemption, the Californian company announced in a WeChat beta that the purchase price could drop by up to 99,000 yuan (equivalent to 12,564 euros).
However, Tesla has not yet implemented this, as prices are heading in the opposite direction for the time being: as previously reported, the carmaker raised prices in China in response to currency fluctuations. According to Bloomberg, Tesla prices in China are rising by around two per cent.
In December a further price increase could be imminent, and that not only for Tesla. The customs duties on vehicles will again be raised to 25 per cent and those on car parts to five per cent, as the Chinese Ministry of Commerce announced in August. At Tesla, the imported Model S and Model X would be affected by this regulation – and at least initially also the Model 3 from Gigafactory 3, as the supply chain there is to be switched over to local partners only gradually.