Tesla Model Y enters a $500 billion government market as a precursor to FSD approval in China

As if to make a counterpoint to the increasing tariff protectionism against Chinese electric vehicles in the US and EU, the local Jiansu government has included the Tesla Model Y in its procurement tender for the first time.

The provincial government has a budget of about $10 million to buy "new energy" vehicles, and Tesla has been listed as approved together with a few local manufacturers or joint ventures.

According to the car unit head of the China Chamber of Commerce, this is just the start, and could pave the way for the inclusion of Tesla in many more government procurement tenders, a market that at last count was worth about $492 billion.

While Teslas are banned from some government premises in China on security grounds, now the official says that "as long as they comply with the requirements, they will be included in the government procurement process," in a move that could become a boon for Tesla Model 3 and Model Y sales in China.

The current 249,900 yuan Tesla Model Y price is just below the tender's threshold for an electric SUV, but what this procurement breakthrough is trying to achieve is to also demonstrate the "clear attitude of the Chinese government to encourage the development of intelligent connected vehicles."

Tesla is on the cusp of getting FSD 12 approved by local authorities, so the tender might be a precursor to an official launch of its own "intelligent connected vehicle" experience in China, where about 20 such systems are vying for attention.

Regulators have now signed off on Tesla's FSD compliance record, and the autonomous driving system is reportedly already in testing on public roads with ten pilot vehicles.

Tesla has priced its Enhanced Autopilot subscription in China at the equivalent of $99/month and an eventual FSD approval could become a nice revenue stream considering the size of the local market.

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