Tesla China may see a boost in domestic sales this year as the country is reportedly looking to extend electric vehicle subsidies that were set to expire in 2022. The information was shared by people reportedly familiar with the matter.
China is the world’s largest market for electric cars, but amidst the recent Covid lockdowns, domestic EV sales have dropped. Tesla is no stranger to this. With Gigafactory Shanghai being closed for the majority of April, the electric vehicle maker, which produces China’s top premium SUV, saw a sales decline of 97.7% month-over-month.
According to a Reuters report, government departments such as the Ministry of Information and Industrial Technology (MIIT) are looking into the idea of continuing subsidies to EV buyers in 2023. The terms of the 2023 extension, however, were not shared by the publication’s sources, who have opted to remain anonymous because the discussions are private.
China’s EV incentive program has greatly helped make the country the world’s largest electric vehicle market. Since 2009, about 100 billion yuan ($14.8 billion) has been handed out to consumers who purchased qualified electric vehicles, according to an estimate from China Merchants Bank International analyst Shi Ji.
China’s electric vehicle subsidy scheme was initially intended to be phased out by the end of 2020. However, the country opted to extend the program for two years due to the adverse effects of the Covid-19 pandemic. Ironically enough, the pandemic seems to be driving yet another extension to China’s EV subsidy program.
Tesla’s electric vehicles like the domestically-produced Model Y crossover and Model 3 sedan are still premium electric cars, costing significantly more than some of their biggest competitors in the market. If China could extend its EV subsidies to 2023, carmakers such as Tesla could effectively make their vehicles more attainable to car buyers.
For now, however, the MIIT and China’s Ministry of Finance have not issued a statement about the matter.
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