Tesla (TSLA) Wins 10% Tax Exemption On China's Vehicle Sales
Zacks Investment Research | Sep 03, 2019 10:22PM ET
It seems that Elon Musk’s charisma during his recent two-day tour to China has paid off well, as Tesla, Inc. (NASDAQ:TSLA) won exemption from 10% purchase tax on vehicle sales in China. Reportedly, the tax break was announced the same day Tesla’s enigmatic leader Musk met Chinese Transport Minister Li Xiaopeng. The tax reprieve to one of America’s high-profile company comes as a pleasant surprise amid the escalating U.S.-Sino trade war tiff, wherein Beijing plans to impose 25% tariff on U.S. cars and 5% on auto parts, effective Dec 15, 2019.
The exemption is designed to benefit electric cars, primarily those manufactured in China. According to CNN Business, 34 carmakers were on the exemption list. This mainly applies to cars made by joint ventures between Chinese and foreign firms, like Daimler AG (OTC:DDAIF) and Toyota Motor (NYSE:TM) . The only foreign manufacturer that was granted an exemption on its own was Tesla.
The tax break will lower the price that customers have to pay for Model 3, Model S or Model X Tesla cars. On an average, the exemption will reduce the cost of buying new Tesla car by 99,000 yuan.
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