The Tesla Model 3 is slated to become China’s top electric vehicle, predicted analysts from China Securities. The Tesla Model 3’s success in the Chinese market could very well define the electric company’s future as a global automaker. So far, the electric automaker’s Gigafactory 3 seems to be running smoothly thanks to China’s government, which appears to be supportive of Tesla as an EV player in the country.

Based on a tweet by Yicai Global, a China-based media outlet, analysts from China Securities seem optimistic about Tesla’s Model 3. The analysts told Yicai Global that the all-electric sedan may be a favorite in China’s electric car market, partly because the local government has started making significant cuts to its NEV subsidies.

The Chinese government has been rapidly weening people from NEV subsidies recently. So far, it has resulted in a decline in EV sales, reported Sixth Stones. According to the China Association of Automobile Manufacturers (CAAM), eco-friendly vehicle sales decreased to 85,000 units in August 2019 or 15.8 percent, after dropping 4.7 percent the previous month.

Tesla's Model 3 is highly likely to be the top choice in China’s electric car market thanks to big cuts in the government’s NEV subsidies, according to analysts at China Securities. pic.twitter.com/t8hRL96sT1

— Yicai Global 第一财经 (@yicaichina) October 28, 2019

It must be noted that the NEV subsidy applies to plug-in hybrids and hydrogen fuel cell cars along with all-electric vehicles. So there isn’t a strong correlation to declining sales and electric vehicles alone. The drop in purchases of plug-in hybrids and hydrogen fuel cell cars contribute to the decrease in sales significantly.

The Chinese government plans to phase out NEV subsidies after 2020, reported The International Council on Clean Transportation. Tesla was already granted an exemption from the local government’s 10 percent sales tax, which is usually only for vehicles that are made in locally-owned companies. With the removal of NEV subsidies, Tesla will be entering the Chinese EV market on an even playing field alongside other new-energy vehicles made by locally-owned manufacturers, like BYD.

Gigafactory 3 in Shanghai is currently producing the Model 3 and is reportedly ahead of schedule. Tesla China is just waiting for its sales certification to start selling the car in the Chinese market. 

Despite not having a sales certification, though, Tesla has already announced the delivery date for the made-in-China Model 3. The teaser stated Tesla’s sedan would be ready to ship to the people who preordered it by Q1 2020.

The made-in-China Model 3’s price and included features were also listed in the poster. It will come with Autopilot already installed for a price of CN¥355,800 or about US$50,800.

Even with the reduction in EV sales, the Chinese government seems optimistic about a renewable auto industry. The country plans to stimulate sales in the future, so it can meet its EV goal, which involves electric car sales making up at least 60 percent of the local auto sector by 2035.