Purchase Tax Exemption for Tesla: Is China Wooing American Companies With Tax Waivers?

Purchase Tax Exemption for Tesla: Is China Wooing American Companies With Tax Waivers?

The Chinese Ministry of Industry and Information Technology (MIIT), has announced that it would grant a purchase tax exemption to all Tesla vehicles sold in the country. It is such an unbelievably exciting news, in the face of a trade war between the US and China that has forced their companies to severe ties and bask on the uncertainties of economic egotism. The move has given Tesla an edge in an uncommon ground.

The 2019 localization of Tesla’s Model 3 production and its Model Y in 2020, exemption from import duties, all are in the Chines deal with Tesla that the US Government didn’t see coming.

The purchase tax exemption means that buyers could save ten percent ($14, 000) in purchase cost. They are 16 Tesla’s vehicle models currently selling in the Chinese market, and the deal covers them all. Tesla has seen a remarkable growth in China this year. In the second quarter of the year, its revenue climbed 42 percent to $1.5 billion, which is a whopping 13.5 percent of total company revenue, Clean Technica reports.

With the new measures taken, the coming year is likely going to be more lucrative for Tesla. There is proliferating enthusiasm among the locals over the expanding production plants of Tesla in China, and many of them can’t wait to buy from new products. For instance, the construction of Gigafactory 3 has become more like a national pride to the Chinese. It was reported that locals are flocking to the site to fly drones over it,  take pictures and get in the queue for the Model 3s, which will be the first made in China Tesla product come early next year.

The production is expected to yield 250, 000 of the Model 3s, as the excitement among the locals is spurring the demand.

With this latest move, the Chinese Government seems to be on top of their game in the trade war. While the White House is issuing tariffs and sanctions, American companies moving to China is more like a friendly bullet with the American Government on the receiving end.

It actually looks like the “America first” gospel of Donald Trump has unprecedented loopholes that the Chinese Government is set to exploit. With Tesla on the move, it would only take a friendly smile from China for another American company to follow suit.

And in the event where Trump is taking a swipe at some Americans companies like Google, the Chinese playing the good guys with tax waivers is a smart reconnaissance.

Share this post

Post Comment