Source: Securities Times Author: Chen Yukang

Securities Times reporter learned from Tesla on July 5 that several state-owned enterprises (including Chengtu Xingang Group and Lingang Investment and Control Group) in China (Shanghai) Free Trade Pilot Zone Lingang New Area have taken the lead in purchasing a batch of Tesla Model Y vehicles as enterprise functional vehicles.

Recently, Tesla Model Y was included in the Jiangsu Provincial Government's new energy vehicle procurement catalog.

Equal treatment of domestic and foreign capital

Tesla stated that as an official vehicle, Tesla is becoming more and more popular in government agencies around the world, and many national and regional government departments have begun to use Model Y and Model 3 in daily affairs. Tesla has played a role in various official vehicles such as police cars, fire trucks, medical service vehicles, and security patrol vehicles.

Tesla is also favored by the general consumer market in China. According to data from the China Association of Automobile Manufacturers, from May to June 23, the sales of Model Y were ranked first in the domestic passenger car sales list.

According to the second quarter production and delivery report released by Tesla on July 2, the company produced 0.411 million vehicles and delivered 0.444 million vehicles in the quarter ending June 30. The delivery volume increased by 15% month-on-month, higher than market expectations.

Recently, several state-owned enterprises, including Chengtu Xingang Group and Lingang Investment and Control Group, have taken the lead in purchasing a batch of Tesla Model Y vehicles as enterprise functional vehicles. This is a concrete manifestation of equal treatment of domestic and foreign capital in optimizing the business environment, and is also a positive response of Lingang New Area to equal treatment of domestic and foreign-funded enterprises in government procurement activities.

He Lifeng, member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, presided over a symposium on foreign investment work in Beijing on July 1. He Lifeng pointed out that a first-class market-oriented, law-based, and internationalized business environment should be continuously built, and equal treatment should be given to domestic and foreign-funded enterprises to participate in large-scale equipment updates, government procurement, bidding and other activities.

Five years ago, as the first wholly foreign-owned vehicle manufacturing project in China, Tesla's first overseas super factory in Lingang New Area set a "Lingang Speed" record of "starting construction, completing construction, going into production, and going public in the same year". This factory has not only rescued Musk and Tesla from the "capacity hell", but also became one of the most convincing business environment business cards in Shanghai and Lingang New Area.

Five years later, Tesla chose Lingang again. On May 23, 2024, Tesla's Shanghai energy storage super factory started construction, and it only took one month from negotiation to signing the contract, and the "Lingang Speed" increased again.

Tao Lin, vice president of Tesla, said in an interview with a Securities Times reporter that Tesla's Shanghai energy storage super factory is a major energy project in Shanghai. Tesla has deployed the energy storage business unit in Lingang, Shanghai, and one of the important reasons is the rich application scenarios in Lingang. In addition, China has huge potential and demand in the field of energy storage. China is actively promoting energy transformation and implementing the "dual-carbon" goal. As an important support for energy transformation, energy storage systems have broad market space in China.

Tesla enters the procurement catalog of Jiangsu new energy vehicles

Coincidentally, Tesla Model Y recently entered the Jiangsu Provincial Government's new energy vehicle procurement catalog.

According to the "Announcement on the Framework Agreement for the Procurement of New Energy Vehicles for Party and Government Organs, Institutions and Group Organizations in Jiangsu Province for 2024-2025 (III)" disclosed by the Jiangsu Government Procurement Network, Tesla Model Y has entered the Jiangsu Provincial Government's new energy vehicle procurement catalog.

According to relevant procurement solicitation documents, the scope of the purchaser of this framework agreement includes party and government organs, institutions and group organizations at all levels in Jiangsu Province. The procurement targets include sedans, SUVs, commercial vehicles and MPVs, pick-up trucks, medium and large buses, etc., and the SUV price limit is 0.25 million RMB/vehicle, with a requirement that the pure electric cruising range is not less than 400km/h. According to the published information, the specific model in the procurement catalog is the rear-wheel-drive version of Tesla Model Y, with a quote of 249,900 RMB/vehicle.

To this end, the staff of the Jiangsu Government Procurement Center said that it depends on the intentions of the department and the purchasing department of each level of government office. This is an open catalog and is open to all manufacturers. Vehicle models that meet the parameters and prices and have passed certain procedures can be included in the catalog, but users can choose or not choose. The Jiangsu Government Procurement Center also stated that the government does not purchase imported goods, and imported goods require special approval, but Tesla is not an imported product, but a domestic (vehicle).

According to the solicitation document of the open framework agreement procurement published on the Jiangsu government procurement website, the technical requirements for off-road vehicles including SUV are as follows: 5-7 seats, wheelbase greater than or equal to 2600mm, pure electric endurance mileage ≥ 400KM, extended range ≥ 100KM, plug-in ≥ 60KM, fast charging time is not more than 0.8 hours and reaches 80% of fast charging capacity. At the same time, the maximum purchase price is clearly 0.25 million yuan/vehicle.

Tesla Model Y rear-wheel drive version happens to meet the above requirements. Currently, the wheelbase of Tesla Model Y rear-wheel drive version (standard endurance version) is 2890mm, CLTC pure electric endurance is 554 kilometers, and its official guide price is 0.2499 million yuan/vehicle.

The Measures for Further Optimizing the Foreign Investment Environment and Increasing the Attraction of Foreign Investment issued by the Jiangsu Provincial People's Government in February 2024 clearly stipulate that foreign-invested enterprises are guaranteed to participate in government procurement fairly in accordance with the law. The purchasers and procurement agencies of government procurement shall not differentiate or discriminate against foreign-invested enterprises in terms of government procurement information release, supplier condition determination and qualification examination, evaluation standards, etc., and shall not restrict the ownership form, organization form, equity structure, investor nationality, product, service brand and other aspects of suppliers, and shall not treat products, services and domestic enterprises produced by foreign-invested enterprises differently in China.

It is noticed by the reporter that Jiangsu has been in a leading position in the manufacturing and application promotion of new energy vehicles. In recent years, Jiangsu has actively responded to national policies, comprehensively promoted the popularization and application of new energy vehicles in multiple fields. In party and government organs and institutions, new energy vehicles are vigorously promoted and used, and the preset indicators for vehicle electrification have been exceeded. Local governments at all levels in the province actively purchase new energy vehicles for official and law enforcement purposes.

Editor/Lambor