For years China has offered considerable incentives for the purchase of electric vehicles. The East Asian nation creates more pollution than any other country in the world and has attempted to lower atmospheric contamination with these incentives. Now, in the midst of the coronavirus pandemic, the world’s largest car market is cutting subsidies on EVs by 10 percent. It’s a move that will raise prices for hopeful Tesla buyers, despite the California based EV car maker's brand new Shanghai Gigafactory.
Teslas Made in China
Currently, two Model 3 variants, the Standard and the Long Range, are produced and sold in China. The price of the Standard is expected to rise from $42,000 USD to $42,900. While the Long Range Model 3, which is expected to begin sales in June, will see its price rise from $47,800 to $48,500. While not too much of a hit this year, those planning to purchase the vehicle are likely to be a bit perturbed at the additional yuan now needed.
Future Cuts
The 10 percent cut in 2020 is just the first move by Chinese authorities when it comes to reducing incentives around electric vehicles. Next year, China plans to cut EV subsidies by 20 percent and in 2022 they will cut subsidies by 30 percent. So if you plan on getting a Tesla in China in the near future, it might be best to go ahead and buy one now.
Why The Cuts?
Why would China cut EV subsidies as the nation suffers through the current economic crisis caused by the coronavirus pandemic? Not having a clear window into those discussions, we certainly don’t have any concrete answers. But word around the watercooler seems to point towards Tesla’s popularity. It doesn’t seem like Tesla will suffer as much as other car manufacturers due to the coronavirus pandemic and economic crisis, and being a luxury good seems like a reasonable reason for the government to cut its incentives.
Source: Carbuzz