Tesla Cars Included In Chinese Government Purchase List

(RTTNews) - Tesla, Inc.'s (TSLA) Model Y vehicles have received official approval to be used as government vehicles in China.

This marks the first time a non-Chinese automaker has been included in a Chinese government purchase list in the Jiangsu province, according to state-owned media outlet Paper.cn.

The Shanghai-manufactured Model Y is priced at 249,900 yuan ($34,377) on the government's procurement catalog, making it available for government agencies and public entities in the province to acquire as service vehicles.

This inclusion has sparked some resistance in China, but the government has emphasized that the approval specifically pertains to Tesla Model Y vehicles manufactured in China. To address concerns, the Jiangsu government clarified that the Tesla model is classified as "domestic" rather than imported.

Previously, Tesla faced restrictions from accessing certain government and military facilities in China due to espionage and data security apprehensions. However, these constraints were lifted in April, coinciding with a visit by Elon Musk to Beijing, where he met with Premier Li Qiang. During the meeting, Li Qiang hailed Tesla as a model for successful US-China cooperation.

The inclusion of Tesla in the government procurement process reflects China's support for the development of intelligent connected vehicles, regardless of their origin, according to Sun Xiaohong, the general secretary of the car unit of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products.

Tesla has also been impacted by significant tariffs imposed by both the US and the European Union on electric cars produced in China. The EU's tariffs are set to take effect soon, and Tesla is seeking a distinct tariff rate assessment from the Commission, currently facing an average additional tariff of 20.8% as part of a cooperative group under the EU's investigation.