For the first time, Tesla cars have been included on a Chinese government purchase list, according to state-owned media outlet Paper.cn. Tesla is the only foreign-owned electric vehicle (EV) brand featured on the purchase catalog released by Jiangsu province in eastern China. Other brands on the list include Volvo, owned by China’s Geely, and state-owned SAIC.
This inclusion allows government agencies and public groups in Jiangsu to procure Tesla vehicles as service cars, underscoring the strong relationship between China and Elon Musk’s company. The news has sparked widespread discussion on Chinese social media, with some users questioning the appropriateness of foreign cars for government use.
To address these concerns, the Jiangsu government emphasized that the Tesla model listed is “a domestic car, not imported,” according to a report by state-owned National Business Daily on Thursday, citing a government employee.
Tesla, which operates a massive gigafactory in Shanghai, produced approximately 947,000 cars in China in 2023, the majority of which were used locally. Despite repeated attempts, the Jiangsu government did not respond to CNN’s phone calls for comment. On the government’s purchase catalog, Tesla’s Shanghai-made Model Y is listed at 249,900 yuan ($34,377).
China represents a crucial market for Tesla, accounting for more than half of the world’s total EV sales. In 2023, nearly a quarter of Tesla’s total revenue originated from China. However, Tesla faces increasing competition from Chinese rivals. BYD surpassed Tesla in the final quarter of 2023 as the world’s top EV seller. Although Tesla regained its leading position in the first half of this year, the two companies remain in close competition.
Previously, Tesla vehicles were barred from some government and military complexes in China due to concerns over spying and data security. These restrictions were lifted in April after Tesla’s cars passed China’s data security requirements, according to an announcement by a top auto association. This development coincided with Elon Musk’s visit to Beijing, where he met with Premier Li Qiang, who praised Tesla as a “successful model” of US-China collaboration.
Despite Tesla’s growing foothold in China, broader tensions between China and the West persist. The European Commission confirmed on Thursday that it would impose additional tariffs of up to 37.6% on imports of Chinese-made electric vehicles starting Friday. These tariffs, initially announced in early June, aim to curb an influx of cheap Chinese cars allegedly benefiting from unfair government support.
Tesla, a significant exporter of China-made EVs to Europe, has requested a separate tariff rate calculation from the European Commission. Currently, Tesla faces an average additional tariff of 20.8% as part of a group of companies cooperating with the EU’s investigation.