Tesla (NASDAQ: TSLA) stock rose in pre-market trading Friday after its cars made the Chinese government purchase list for the first time.
The Paper, the official Chinese media outlet, reported on Thursday that a local government in China included Tesla’s best-selling Model Y in a list of electric and plug-in hybrid models it can purchase as service cars. The Paper added that this marks the first time the Chinese government has approved Tesla vehicles for purchase.
On June 6, the Jiangsu provincial government in eastern China issued a statement listing 56 batches of new energy vehicles approved for use as service cars by party, government, and public organizations. The list includes the Model Y, produced at Tesla’s Shanghai factory, and the XC40 from Volvo Cars. Zhejiang Geely Holding Group, a Chinese automaker, owns Volvo Cars. The remaining 54 batches consisted entirely of Chinese-branded electric and hybrid vehicles.
Neither the government nor Chinese media disclosed specific details regarding the quantity of Model Y cars that the Jiangsu provincial government intends to procure.
Tesla had previously faced restrictions preventing its vehicles from entering certain Chinese government and military compounds. However, these restrictions were lifted following an endorsement from China’s top auto industry association in April, which confirmed Tesla’s compliance with data collection regulations for its fleets in China.
Tesla’s Market Dynamics in China
Despite this positive development, Tesla has faced challenges in the Chinese market. Deliveries of China-made Tesla vehicles dropped by 9% in the first half of the year compared to the same period in 2023, amid increasing domestic competition and potential tariff concerns affecting Chinese car exports.
Tesla CEO Elon Musk’s visit to China in late April, where he met with Premier Li Qiang, has reportedly yielded positive outcomes. China has shown increased support for Tesla, which plans to establish a data training center and introduce its Full Self-Driving software in China this year, even as technological tensions between China and the United States persist.
Tesla (NASDAQ: TSLA) Stock Movement
As of 05:18 a.m. (Eastern Time) Thursday, TSLA stock traded at $250.95, marking a 1.85% increase compared to the previous trading session.
Edward Cooke is a financial analyst, freelance writer, and editor. He has six years of experience in financial journalism. He has an in-depth understanding of equities markets, tracking major indices and providing real-time analysis on stock price movements, corporate earnings, and market sentiment.
