Electric vehicles of Tesla Inc in China will be enjoying a tax exemption in the country as the Ministry of Industry and Information Technology (MIIT) issued a statement on its website stating purchase tax exemption for Tesla’s electric vehicles.
Currently sale of each vehicle in China is subject to levy of 10% as purchase tax, but the current decision will bringing in a reduction in prices of Tesla’s cars in China by maximum of 99,000 yuan ($13,957.82), said Tesla in a post on its social media WeChat account .
The statement of MIIT, without describing any reason of tax exemption given to Tesla cars in the country, contains all the sixteen variants of the Tesla models currently being sold in the country which also includes Model 3, S and X.
Frank Schwope, an analyst at Nord LB, described the tax exemption as great for Tesla given that China is the key strategic market for the carmaker to become profitable. But analyst also pointed out new punitive tariffs that can put extra burden on Tesla and are still in the discussions.
Tesla is not in the practice of disclosing its sales country wise, but according to estimates by consultancy firm LMC Automotive, Tesla’s sales in China till the end of July were 23,678 vehicles, a figure that is roughly double to the number of cars Tesla had sold in China in the same period last year.
For the Elon Musk-led company, China being the world’s biggest market for electric vehicles, have lot of opportunities and for the reason company is already going through a process of building its plant in Shanghai which will be Tesla’s first facility overseas and is likely to be start production by the end of this year with capacity of building 250,000 vehicles annually after including the production of Model Y.