Tesla’s best-selling Model Y has been included in a list of electric and plug-in hybrid models that a local government in China can purchase as service cars, according to the official Chinese media outlet, The Paper, on Thursday. This marks the first time Tesla’s cars have been eligible for government purchases in China.
The Jiangsu provincial government in eastern China published 56 batches of new energy vehicle procurements for use as service cars by party, government, and public organizations in a government statement on June 6.
Besides the Model Y made in Tesla’s Shanghai factory and Volvo Cars’ XC40, the other 54 batches were all Chinese-branded EVs and hybrids. Volvo Cars is owned by Chinese automaker Zhejiang Geely Holding Group.
Neither the government nor Chinese media specified the number of Model Y cars that the Jiangsu provincial government might purchase. Tesla’s cars had been banned from some government and military compounds in China.
These restrictions were lifted after Tesla won an endorsement from the country’s top auto industry association in April, which stated that the data collection by Tesla fleets in China was compliant.
As demand for Chinese cars abroad is threatened by potential tariffs and domestic competition intensifies, Tesla’s deliveries of China-made vehicles fell 9% in the first half of the year compared to the same period in 2023.
However, Tesla CEO Elon Musk’s trip to China in late April to meet Premier Li Qiang appears to have paid off. China has increased its support for Tesla, which plans to build a data training center and roll out its Full Self Driving software in the country this year, despite ongoing tech rivalry tensions with the United States.
