The Chinese government is going all out to support Elon Musk and his company Tesla. The Chinese industry ministry has now included Tesla Model 3 Made-in-China cars in its lists of vehicles recommended for government subsidy.
Although the level of subsidy is still not clear, it will definitely give Tesla's market a boost in China. According to Reuters, a document published by the Ministry of Industry has recommended two variants of Made-in-China Model 3 vehicles, which were on the list for new energy vehicle subsidies.
Big opportunity for Tesla
A subsidy can mean a lot for Musk given that he has been focusing more on capturing the Chinese electric car market with his new state-of-the-art Shanghai Gigafactory. Tesla's Gigafactory 4 in Shanghai broke ground only in January and started trial production in a record time in the third quarter.
The first Made-in-China Model 3 was unveiled in early November and the company aims to start sales in another few days. This definitely shows Tesla's increased focus on the China market.
A hefty subsidy can mean a lot given that the Model 3 has been priced at $50,000. A subsidy could help lower the price of the vehicle thus pinching the buyers' pockets less.
Also, the Shanghai Gigafactory was built at $2 billion, which was quite less compared to the company's plants in the United States. The electric carmaker aims to produce 1,000 vehicles every week at it Shanghai plant by the end of this year and start delivering its China-made cars to buyers by January 25.
China the place to be for Tesla
Tesla is rightly focusing on China given the growing demand for electric vehicles in that country. Electric car sales touched 1.98 million worldwide in 2018 according to a report by International Energy Agency. China is the largest market for new cars not only in the world but also the biggest market for electric cars. More than 1 million electric vehicles were sold in China last year
This has seen an increasing number of carmakers making an effort to capture the Chinese car market. Last week BMW announced that it will come up with a new factory in China in collaboration with Great Wall Motor.
Given the immense opportunity, Tesla also has been ramping up hiring in its Shanghai factory. The annual production capacity of Shanghai's Gigafactory in the first phase is expected to reach 250,000, with 150,000 units of Model 3 cars likely to be rolled out.