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Tesla China Model 3 Update: NEV Susidies Will Not Be Cut in July, Says MIIT Minister

by Claribelle Deveza January 11, 2020


China will not cut NEV subsidies this coming July, confirmed Minister of Industry and Information Technology Miao Wei. This will likely continue the MIC Model 3s surging demand in the country. Many have speculated that the locally-made Tesla sedan’s demand would drop after China cuts NEV subsidies.

According to Reuters, the MIIT Minister made the announcement during the EV100 forum in Beijing. Senior auto industry executives gather at the annual event and discuss policies and the car market.

Minister Wei also shared that over 163,000 NEV units were sold in China in December 2019. A total of 1.2 million NEVs were sold in 2019, revealing that the demand for electric vehicles is still going strong in China.


Demand for Tesla’s MIC Model 3 has been surging since its massive price drop to RMB 299,050. The GF3-produced sedan also benefits from a purchase tax exemption, as well as the NEV subsidies from the Chinese government on top of the price reduction.

A reported 1,040 units were sold in seven Beijing showrooms in one day. The MIC Model 3 seems to have a price point that is very agreeable to consumers in the Chinese market. And with the MIIT Minister’s announcement about the NEV subsidies continuing past July 2020, the demand for the MIC Model 3 may very well extend into Q3 2020 and beyond.

According to Tesla China executives and Tesla Q4 2019 report, Gigafactory 3 already reached a run-rate of 3k a week. Even with the impressive run-rate, however, it appears that GF3 is unable to match production rates with the amount of Made-in-China Model 3 orders coming in every day.

Even more interestingly, this surge in demand for Tesla China's electric vehicles is only being caused by the Model 3. Tesla CEO Elon Musk has kicked off the Model Y program to begin in China, which would start the development of the crossover for the local Chinese market. Once the China-made Model Y is released in China, the electric car maker may very well see even more demand for its vehicles. 

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