The new model of tesla Model Y made in China was officially launched on New Year’s Day this year with a big drop of 160,000 yuan (about $24,000), why is Tesla so spastic? The media revealed that because Tesla signed a betting agreement with the Shanghai government for tens of billions of yuan, Tesla is willing to trade price for volume and cut prices like crazy to seize the market.
China Youth Network reports that before coming to Shanghai to build a factory, Tesla CEO Musk signed a betting agreement with the Shanghai government. Shanghai gave Tesla a loan at an annual interest rate of 3.9 percent, totaling more than the cost of building the factory, at a much lower interest rate than other companies; the Shanghai Free Trade Zone sold the Lingang land to Tesla for a tenth of the price, in other words, Musk barely had to pay from his wallet to build the factory, and China offered land and money with both hands.
But the deal is that Tesla will have to pay an annual tax of 2.23 billion yuan ($340 million) to Shanghai starting in 2023, plus invest 14.08 billion yuan ($2.18 billion) in the Shanghai factory over the next five years. If that can’t be done, Tesla risks returning the land occupied by the Shanghai plant.
China is willing to help Tesla, of course, for a reason. Because official support for the new energy vehicle industry has spared no effort, with subsidies amounting to more than CNY100 billion in the decade from 2009 to 2019, but with high subsidies, it has always been difficult for China’s electric vehicles to develop a competitive edge against foreign investors.
The introduction of Tesla immediately pulled the development of the new energy vehicle industry chain. Under China’s “localization” insistence, there are more than 130 suppliers supplying Tesla’s powertrain, electric drive system, charging, chassis, body, central control, interior and exterior trim, etc., and Chinese companies occupy half of them.
Among the large number of land-based suppliers, there is no shortage of cut into the kernel of the industry chain, including lithium batteries, including Ningde Time, Enjie shares, Kodaly, Putai Lai; vehicle communication, including Zhongke Chuangda, central control system, including Junsheng Electronics, Changxin Technology; vehicle assembly, including Top Group, Huayu Automobile.
Tesla announced its entry into the Chinese market from mid-2018, and Tao Lin, vice president of Tesla, confirmed at the end of 2020 that Tesla’s “localization” in China has been basically realized.
In addition to the consideration of pulling the new energy vehicle industry chain, China’s assistance behind Tesla also reveals that China is eager for structural transformation, transitioning from the fuel car auto market to the new energy + source auto market as soon as possible.
Tesla in the Chinese market can not only force China’s new energy industry to upgrade and transform, but also get rid of China’s oil imports, the control of dollar finance behind the oil, “to get rid of the dependence on fuel imports” is the ultimate purpose of China’s open market.
Recent Comments