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Tesla gets tax break in China, but it hardly makes it more attractive to customers – Boom Bust

Tesla gets tax break in China, but it hardly makes it more attractive to customers – Boom Bust
Exemption from a 10-percent purchase tax gives Tesla hope in the important Chinese market, but RT’s Boom Bust investigates whether it’s enough to offset Elon Musk’s firm’s other troubles.

On Friday, all Tesla vehicles sold in China were granted a tax exemption that could reduce the cost of its electric cars by up to 99,000 yuan (nearly $14,000). However, Tesla, which earlier announced it would raise the price of its cars to compensate for tariffs, has not lowered prices.

“That’s gonna be more profit, which is what they need,” Lauren Fix, an automotive analyst known as ‘The Car Coach’, told Boom Bust. She added that the company has been trying to quickly ship as many vehicles as possible to China, and now we can only hope that Tesla can sell some of them and they “don’t just sit there.”

However, there are other cars in the same luxury market, such as Jaguar, Audi, and BMW. And the narrow base of wealthy customers is not going to expand, while the competitors take Musk’s market share.

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“It’s a different marketplace, it does not hit the masses. And it won’t hit the masses as long as the prices are high and the time to charge is way too long and the distance between charges need to be twice what it is now in order for the masses to be interested,” Fix said.

She added that Tesla is missing one important thing, and it’s not about the design or technology features of their competitors. The problem is with the dealer networks which take care of and support the vehicles. When it comes to Tesla, Fix explained, people have to wait up to 12 weeks to get a spare part, which is “unacceptable” and just frustrates potential customers.

For more stories on economy & finance visit RT's business section

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