Tesla makes debut on Chinese government purchase list

Tesla’s popular Model Y has been approved for government purchases as a service vehicle by a local government in China, marking a significant milestone for the American automaker in the region. According to China’s official media outlet, this is the first time Tesla cars have been included in such procurement plans in China.

The Jiangsu provincial government in eastern China announced 56 batches of new energy vehicle procurements for use by parties, government, and public organisations, as detailed in a statement on June 6.

Alongside Tesla’s Model Y, which is manufactured at Tesla’s Shanghai factory, Volvo Cars’ XC40 was also listed. Notably, the remaining 54 batches consisted exclusively of Chinese-branded electric vehicles (EVs) and hybrids. Volvo Cars is owned by Zhejiang Geely Holding Group, a Chinese automaker.

The specific number of Model Y cars to be procured by the Jiangsu government was not disclosed by either the government or Chinese media.

Tesla had previously faced restrictions preventing its vehicles from entering certain government and military compounds in China. However, these restrictions were lifted after receiving endorsement from China’s top auto industry association in April, affirming compliance with data collection regulations.

Despite challenges such as reduced demand for Chinese-made cars abroad and increased domestic competition, Tesla experienced a 9 per cent decline in deliveries of locally made vehicles in the first half of the year compared to 2023. However, Tesla CEO Elon Musk’s visit to China in late April, where he met with Premier Li Qiang, appears to have yielded positive outcomes.

China has shown growing support for Tesla, which plans to establish a data training centre and introduce its full self-driving software in the country later this year. These developments come amid ongoing technological rivalry and trade tensions between China and the United States.

Attribution: Reuters