Tesla’s Chinese-built Model 3 cars would receive state subsidies

Tesla Model 3 spied

Tesla Inc stated on Friday that its Chinese-built Model 3 cars would get state subsidies, a move that will significantly help the electric automaker’s push into the world’s biggest auto market.

China’s industry ministry had previously stated Tesla’s Model 3 cars, being constructed at its $2 billion factory located in Shanghai, were on a list recommended for subsidies for new energy vehicles (NEVs), which consists of plug-in hybrids, battery-only electric vehicles and those functioned by hydrogen fuel cells.

Tesla stated the subsidies had been secured.

Two variants of Tesla Model 3 vehicles are on the list for the NEV subsidy program, as per the website of China’s Ministry of Industry and Information Technology.

The California-based electric vehicle maker intends to make over 1,000 vehicles a week by the end of 2019 for its Shanghai plant and provide the China-made vehicles before the Chinese new year on January 25.

The yearly capacity at the factory in its first phase is anticipated to reach 250,000 vehicles, equating to about 4,800 a week. This will consist of 150,000 Model 3 cars.

It is not yet clear how much of a subsidy the vehicles would receive. The starting cost for China-made Model 3 cars is 355,800 yuan ($50,550), according to Tesla’s website.

China hopes sales of NEVs which makes up around 4.6% of the overall market in the last year, can reach a quarter of car sales in 2025.

Tesla, led by billionaire Elon Musk, is preparing a broad after-sales network in China.

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