The Chinese government has added Tesla’s Model S, Model X and Model 3 to a list of EVs that qualify for exemptions to the country’s 10% vehicle sales tax. No reason was offered for the move, which took China-watchers by surprise. Imported vehicles are generally not eligible for the exemption.
As fate would have it, the move comes just as Tesla has increased prices of its vehicles in China by about 3% in order to compensate for exchange rate fluctuations and the on-again, off-again trade war. The California carmaker announced that the tax exemption could save buyers up to 99,000 yuan ($13,957) on a new Tesla.
The company’s Gigafactory 3 in Shanghai is scheduled to begin production later this year, building Model 3s for the China market. Some variants of Model 3, as well as Model S and Model X, will still be imported from the US.
As Electrek‘s Fred Lambert points out, this could be big boost to Tesla’s Chinese fortunes. Tax savings will sway only a certain number of potential buyers, but given the size of the market, that could represent a huge number of vehicles.