ANALYSIS: Why Beijing Approved Tesla Cars for Use as Government Vehicles in China

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Local Chinese authorities have expanded their Tesla brand acquisition.

Tesla’s electric cars were recently added to government procurement lists in the eastern coastal areas such as Shanghai and Jiangsu Province.

One China analyst told The Epoch Times that the Chinese Communist Party (CCP) is giving Tesla special treatment because the regime wants to acquire the carmaker’s battery technology, which could alleviate production bottlenecks in Chinese electric vehicles (EVs).

Tesla’s stock price rose 25.88 percent in the first week of July, and its market capitalization increased by $163.32 billion, according to Chinese financial media. This comes after some local authorities expanded their Tesla brand acquisition.

On July 5, Shanghai’s Lingang Special Area Investment Promotion Service Center posted on its official Weibo account that several local state-owned enterprises, including the City Investment Xingang Group and the Lingang Investment Holding Group, purchased Model Y vehicles produced by Tesla (Shanghai) Co., Ltd., for corporate use.

The government procurement website of Jiangsu, a coastal province adjacent to Shanghai, also announced on June 6 that among the 56 shortlisted car companies for the 2024—25 electric vehicle suppliers list, Tesla was the only foreign electric car brand listed.

China analyst and U.S.-based economist David Huang told the Chinese edition of The Epoch Times that the CCP’s decision to add Tesla cars to an approved government procurement list has “symbolic significance.”

“For some time to come, the CCP will adopt a strategy of not suppressing Tesla,” Mr. Huang said, adding that he believes Tesla CEO Elon Musk may have reached a deal with Beijing that would allow the company to bypass the CCP’s stringent scrutiny of foreign products.

Last year, Tesla suffered sales setbacks in China due to multiple pressures, such as fierce competition in the Chinese auto market and the CCP’s curbs on Tesla sales over concerns about data security and that its technology—particularly the Starlink internet service found in some Tesla vehicles—could be used to break the communist regime’s internet blockade.

By Jon Sun and Xin Ning

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