Tesla vehicles will be exempt from a purchase tax in China, the country’s automotive regulatory body announced Friday.
The Ministry of Industry and Information Technology issued the memo, which outlined broad tax exclusions for electric vehicles, but did not give a reason why the car’s were excluded. The Tesla models specifically mentioned include the Model 3, Model S and Model X.
The move will help Tesla avoid increased costs caused by tariffs in the current trade war with China. Last week China said it planned to begin taxing autos tariffs – a 25% tariff on cars imported from the U.S. as well as a 5% tariff on auto parts and components. The tariff is set to go into effect on Dec. 15.