Wang Zhao/AFP/Getty Images
People view the Tesla Model Y at a Tesla showroom in Beijing, China on January 5, 2021.
Hong Kong
CNN
—
Tesla cars have been placed on a local Chinese government’s purchasing list for the first time, according to state media Paper.cn.
This means government departments and public organisations within the province can procure them as service vehicles, highlighting the close ties between China and Elon Musk’s company.
Tesla is the only foreign electric vehicle brand listed in a purchasing catalogue published by the government of eastern China’s Jiangsu province, along with Volvo, owned by China’s Geely Automobile, and state-owned SAIC Motor.
The move has sparked discussion on Chinese social media, with some users questioning whether the government should even consider allowing foreign cars.
The Jiangsu provincial government has sought to ease concerns by saying Tesla’s models are “domestic cars, not imported cars,” the state-run National Business Daily reported on Thursday, citing a government official.
Tesla, which has a huge Gigafactory in Shanghai, built about 947,000 cars in China in 2023, most of which were used locally.
The Jiangsu provincial government did not respond to a phone call from CNN. A government purchasing catalog listed the price of a Tesla Model Y made in Shanghai as 249,900 yuan ($34,377).
China has become an increasingly important market for Tesla, accounting for more than half of the company’s production. Total EV sales worldwide. Last year, Tesla earned nearly a quarter of its total revenue from China.
But the American automaker also faces growing competition from its Chinese rival. BYD overtook Tesla as the world’s largest seller of EVs in the fourth quarter of 2023. Tesla regained its position in the first half of this year, but the two companies remain neck and neck.
Tesla cars have previously been banned from some government and military facilities in China due to concerns about espionage and data security.
Those restrictions were lifted in April, when the Association of Major Automobile Makers announced that Tesla’s cars met China’s data security requirements. The announcement came the same day that Musk visited Beijing and met with Premier Li Qiang, who praised Tesla as a “successful model” of U.S.-China cooperation.
But on most fronts, tensions between China and the West are rising.
The European Commission confirmed on Thursday that it would impose additional tariffs of up to 37.6% on imports of Chinese-made electric vehicles from Friday.
The tariffs, first announced in early June, are seen as a necessary measure to stop the EU from smuggling cheap Chinese cars made with “undue” government support.
Tesla, a major exporter of Chinese-made electric vehicles to Europe, requested a separate tariff calculation, according to the European Commission. The company is currently facing additional tariffs averaging 20.8% as part of a group of companies cooperating with the EU investigation.
Tesla did not respond to a request for comment.
