Tesla rolls into Jiangsu tenders, sparks buzz on future orders

Tesla Inc and other foreign brands are expected to participate in government procurement across China as the US electric vehicle giant has been included on a local government procurement list for the first time, said experts and industry insiders on Thursday.

Despite factors like rising protectionism, the European Union's plan to impose tariffs on Chinese EV imports and the United States' accusation that China's new energy industry has overcapacity, China has again sent a clear signal that it is further opening its doors to multinational corporations for healthy competition and mutual gains, they said.

According to an online tender of East China's Jiangsu province, the local government plans to buy new energy vehicles, including sedans, SUVs and buses, worth 73 million yuan ($10 million) this year and next.

Local government authorities, government-related institutions and organizations could buy a range of NEVs, including Tesla's Model Y, for the first time.

The Model Y, with a starting price of 249,900 yuan in China, is currently Tesla's most popular SUV. Its price is less than the 250,000 yuan limit specified for SUVs in the e-tender.

Three batches of over 200 vehicle models made by domestic and joint venture EV-makers, such as BYD and SAIC Volkswagen, were included on Jiangsu's purchase list.

"Tesla's entry into the government procurement process shows a clear attitude of the Chinese government to encourage the development of intelligent connected vehicles, irrespective of whether the manufacturer is Chinese or foreign. As long as they comply with the requirements, they will be included in the government procurement process," said Sun Xiaohong, general secretary of the car unit of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, a national organization responsible for foreign trade of machinery products. The chamber is representing China in the counterappeal against the EU's decision to impose additional tariffs on Chinese EVs from Friday.

In April, Tesla, along with five Chinese carmakers, cleared a key data security test in China conducted by the China Association of Automobile Manufacturers and a national computer network center.

"The entry into the government procurement process in one province is just the start. More provinces and regions will open up for foreign cars as long as they meet the specified requirements," Sun said.

Agreed Wang Peng, a researcher at the Beijing Academy of Social Sciences. Tesla and other foreign automakers, he said, are likely to land more government orders in the future.

"As China is currently spurring the NEV industry through opening-up, other provinces and regions will follow this trend and gradually allow foreign brands in their procurement process," said Wang.

He said Tesla's successful application to participate in Jiangsu's procurement process indicates that China's NEV policies are becoming more open and inclusive. Focus is shifting to market competitiveness and technical strengths.

In May, Tesla founder Elon Musk also proposed to test its robotaxi in China and the Chinese government will partially support its trial, as China Daily was the first to report.

"As the NEV market continues to grow rapidly, the Chinese government may consider introducing more foreign brands to compete and cooperate for more mutual gains and healthy development.

"It's an obvious contrast to rising protectionism of Western markets like the EU and the US, which are trying to suppress China's NEV industry," Wang said.

In the latest development, China and the EU, based on facts and rules, will expedite consultations over the bloc's decision to impose hefty tariffs on Chinese-made battery electric vehicles, with the aim of reaching a solution that is acceptable to both sides as quickly as possible, the Ministry of Commerce said on Thursday.

Wang said government procurement of NEVs will help support the NEV industry and accelerate the adjustment of the energy structure.

Last year, Chinese authorities said that government agencies and organizations should gradually increase NEV proportion in their fleets. Shandong province, for instance, noted that its new government-related vehicle purchases, except for some special work, should all be NEVs by 2025.