Tesla surges after China says it will exempt several of the company's models from its purchase tax
- Shares of Tesla surged more than 4% in early-morning trading on Friday after China's automotive regulator said it planned to exclude several Tesla models from a purchase tax.
- China's Ministry of Industry and Information released the statement on Friday, and the list includes Tesla's Model 3, Model S, and Model X vehicles.
- Tesla recently raised prices in China after the yuan began trading at its lowest level in more than decade, according to Reuters.
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Tesla's stock surged 4% early on Friday after China's primary automotive regulator said it intends to exempt several of the company's models from an auto purchase tax.
China's Ministry of Industry and Information published the statement on Friday, according to CNBC.
The list of exemptions contains electric vehicles including Tesla's Model 3, Model S, and Model X.
Tesla increased prices in China earlier this week after the yuan began trading at its lowest level in more than a decade, according to Reuters. The exemptions could help Tesla offset costs it incurs due to the ongoing US-China trade war.
The electric car manufacturer has also been contemplating raising the price of its vehicles in China to offset the cost of upcoming auto tariffs in December, Reuters reported.
The purchase tax exclusion will be welcome news for Tesla, as China remains a key opportunity for the company to ramp up sales of its vehicles overseas.
"Tesla's ability to penetrate China as a market opportunity is key to its long-term growth," Wedbush analyst Daniel Ives said it a note to clients on Thursday. Ives also pointed out that China has been a "wild card" for Tesla in terms of demand due to the possibility of new tariffs.
Shares of Tesla are down 33.38% year-to-date through Thursday's close.
