Tesla Secures Status as Official Chinese Government Vehicle

For the first time, Tesla cars have been included on a Chinese government procurement list, as reported by state-owned media outlet Paper.cn.

Tesla is the only foreign-owned electric vehicle (EV) brand featured on the procurement 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 listing means that government agencies and public organizations in the province can now purchase Tesla vehicles for official use, underscoring the strong relationship between China and Elon Musk’s company.

The news has sparked considerable discussion on Chinese social media, with some users questioning whether foreign cars should be used by the government. To address these concerns, the Jiangsu government clarified that the Tesla model in question is manufactured domestically and not imported, according to a report by the state-owned National Business Daily, which cited a government official.

Tesla operates a large gigafactory in Shanghai, where it produced around 947,000 cars in 2023, primarily for the local market. The Jiangsu government did not respond to CNN’s inquiries. The government’s procurement catalog lists the Shanghai-made Tesla Model Y at 249,900 yuan ($34,377).

China has become a crucial market for Tesla, accounting for over half of the global EV sales. In 2023, nearly a quarter of Tesla’s total revenue came from China. However, Tesla faces increasing competition from Chinese EV manufacturers. BYD surpassed Tesla in the last quarter of 2023 as the world’s largest EV seller, though Tesla reclaimed the top spot in the first half of this year.

Previously, Tesla vehicles were banned from some government and military areas in China due to concerns over spying and data security. These restrictions were lifted in April after a top auto association announced that Tesla’s cars met China’s data security requirements. This announcement coincided with Musk’s visit to Beijing, where he met with Premier Li Qiang, who praised Tesla as a “successful model” of US-China collaboration.

On a broader scale, tensions between China and the West continue to rise. 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, first announced in early June, aim to curb the influx of inexpensive Chinese cars produced with “unfair” government support.

Tesla, which exports a significant number of its China-made EVs to Europe, has requested a separate tariff rate calculation. Currently, Tesla faces an average additional tariff of 20.8% as part of a group of companies cooperating with the EU’s investigation.

Tesla did not respond to requests for comment.