Tesla gets a 10% sales tax exemption

Source: China Did for Tesla What Trump Didn’t - Market Realist

Tesla’s Chinese Gigafactory has gone from groundbreaking to trial assemblies in a matter of just eight months. The construction work at the factory started in January this year. Within just three days of applying, on August 19, Tesla received a comprehensive acceptance certificate from the Chinese government. On August 26, Teslaratireported that leaked images and videos showed Tesla conducting trial production runs of its China-made Model 3. Then came the reports that Tesla would unveil its China-made Model 3 on August 29 at the opening ceremony of the Shanghai World Artificial Intelligence Conference. According to Inside EVs, Tesla actually showcased its first China-made Model 3 on August 29.
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China is Tesla’s largest market outside the US. In the first half of 2019, Tesla’s revenue in the country accounted for 13.5% of its total revenue. Moreover, its Chinese sales jumped 42% year-over-year, mainly due to the launch of its Model 3 in the country in February. Overall auto sales in the US have been on a downtrend since 2016. Therefore, automakers are looking for markets outside the US to maintain their top and bottom lines.
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The impressive progress of the China Gigafactory wasn’t the end of the surprises for Musk during his visit. On August 30, China announced that it would exempt cars made by Tesla from its 10% purchase tax. Citing China’s Ministry of Industry and Information Technology, Reutersreported that the country would exempt 16 Tesla models from its purchase tax. The exemption will reduce the prices of Tesla’s Model S, Model X, and Model 3 in the country.

According to CNN, 34 carmakers are on the exemption list. The list, however, mostly applies to cars made via joint ventures between Chinese and foreign automakers, such as Toyota (TM) and Daimler (DDAIF). Tesla is the only foreign automaker that has this exemption. Interestingly, this development came after Musk met Chinese Minister of Transport Li Xiaopeng.​

Sounds good to me.

Bob Wilson