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China gives Tesla tax break 3 days after Musk's Taiwan advice

Model S and Model X receive Chinese tax breaks after foreign ministry praises his Taiwan plan

Tesla founder Elon Musk speaks at the ONS (Offshore Northern Seas) fair on sustainable energy in Stavanger, Norway, Monday, Aug. 29, 2022. (Carina Joh...

Tesla founder Elon Musk speaks at the ONS (Offshore Northern Seas) fair on sustainable energy in Stavanger, Norway, Monday, Aug. 29, 2022. (Carina Joh...

TAIPEI (Taiwan News) — Two Tesla models were handed tax exemptions by Beijing on Monday (Oct. 10), after a report cited the company's CEO Elon Musk as recommending Taiwan should be run along the lines of Hong Kong's "one country two systems" model — and one day after China expressed approval of his plan.

On Friday (Oct. 7), the Financial Times published an interview with Musk when he recommended Taiwan become absorbed into China as a special administrative zone that is "reasonably palatable." The tech tycoon then speculated that while it "won't make everyone happy," the terms of Beijing's rule over Taiwan could be "more lenient than Hong Kong."

Musk's unsolicited advice was roundly rejected across the Taiwanese political spectrum, including Democratic Progressive Party (DPP) Spokesperson Huang Tsai-lin (黃彩玲), who on Saturday (Oct. 8) said Musk “caters to the threat of the aggressor by sacrificing Taiwan’s independence, completely ignoring the limitless ambitions of authoritarian rulers."

On Tuesday (Oct. 11), Premier Su Tseng-chang (蘇貞昌) said that Musk, "truly does not understand Taiwan nor cross-strait relations." He called for more emphasis to be placed on the words of the leaders of democratic countries.

By Wednesday (Oct. 12), Defense Minister Chiu Kuo-cheng (邱國正) said the military would not buy more Tesla vehicles after his comments on converting Taiwan into a special administrative zone. Although the vehicles had been purchased to meet the government's environmental policies, Chiu stressed that if a procurement leads to concern or discomfort, it would be halted or banned.

Initially, Ministry of Foreign Affairs, Spokesperson Mao Ning (毛寧) was cited by China’s state-run Central Television News on Saturday (Oct. 8) as describing Musk's proposal as an "inappropriate statement." However, on Sunday (Oct. 9), Mao backtracked on his previous comment and was quoted by CGTN as appearing to support Musk's claims:

"Provided that China's sovereignty, security and development interests are guaranteed, after reunification Taiwan will enjoy a high degree of autonomy as a special administrative region," Mao said.

The next day, the Ministry of Industry and Information Technology (MIIT) announced that Tesla's Model S and Model X variants would be exempt from the vehicle purchase tax. The announcement indicates the two models will soon enter the China market again after a long hiatus.

The consensus of statements issued by politicians from the major political parties in Taiwan, including the DPP, Kuomintang, New Power Party, and Taiwan People's Party was that Taiwan is a sovereign county not beholden to the whims of a businessman. Taiwanese politicians and citizens alike said they believed Musk's pro-China comments reflected his business interests, with 30-50% of Tesla’s production coming from his Shanghai factory.