Tesla China Responds to Reports of Supplementary Payment Requests

Some Tesla owners in China have recently received notice letters to make up payments, allegedly because they did not meet the total mileage condition within a specified time period, and therefore could not receive state subsidies. Tesla China responded to domestic media on Tuesday, saying that the company sent reminders according to national regulations, and that non-private car owners who did not meet regulatory conditions would receive such notices.

Tesla said that Chinese authorities have clearly stipulated that the vehicles would receive new energy subsidies. “Except for private purchase of new energy passenger cars, the accumulated mileage of special vehicles for operation (including sanitation vehicles), official vehicles for party and government organs, and vehicles in civil aviation airports, or other types of new energy vehicles, must reach 20,000 kilometers.” In other words, for vehicles within the above scope, according to the data records of the national supervision platform, the mileage has to reach 20,000 kilometers within two years, before the government can grant subsidies to vehicle firms.

The company also said that it had sent emails, short messages and pop-up reminders to non-private car users whose mileage did not meet the requirements several months ago. After many reminders, non-private users who still did not meet the requirements will receive a notice of making up payment.

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State subsidies will lag by two years. Therefore, involved subsidized models will begin from those made in 2020, including domestically made 2020 Model 3s with a price of less than 300,000 yuan ($44,655). “This has no impact on private car purchase,” said the company.

On the other hand, Chinese officials have made a further explanation in view of the fraudulent subsidies of new energy vehicles. According to Article 3 of the notice on “Further Improving the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles” issued by the Ministry of Finance in 2019, starting from 2019, vehicles with operating mileage requirements will be allocated a part of funds in advance after the sales are licensed, and can apply for liquidation after meeting the mileage requirements. After the release of the policy, the licensed vehicles will not be subsidized if the mileage does not meet 20,000 kilometers within two years from the date of registration, and the pre-allocated funds will be deducted at the time of liquidation.