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Historically, China has stimulated NEV sales by exempting purchases from vehicle purchase taxes—a policy initially implemented in 2017, then extended multiple times, most recently through 2022, with expectations it will be extended again until 2023. Industry insiders believe this extension will be renewed for several more years, providing continued support to EV demand.
Potential Reintroduction of State Subsidies
While China ceased direct subsidies for NEV purchases last year, the growth in the sector has notably slowed since then. Investors are increasingly optimistic that the government may reintroduce or even enhance these subsidies, which would be highly bullish for Tesla, as it operates heavily within China and benefits from vehicle incentives.