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.