Chinese Province Adds Tesla to procurement list, multiple businesses are ready？

The procurement list is getting longer.

The Tesla Model Y was added to the government procurement list of Jiangsu Province on July 4th. After that, state-owned enterprises like Shanghai Chengtou Xinggang Group and Lingang Investment Control Group bought Tesla Model Y cars for their businesses. After that, Yunnan and Jilin also add Tesla to the procurement list.

Regarding this, CCTV News commented on July 25th: 'This move is great for protecting Tesla products and helping them enter different sectors all over the country.' Being included in multiple regional government procurement catalogs means that it has met the domestic data security requirement of 'not transferring data overseas,' which also sets the stage for Tesla's FSD to be introduced in China earlier than expected. 

The data is safe and compliance

The fact that Tesla is now being included in the vehicle procurement lists of local governments and state-owned enterprises is a game-changer. It's helping to break down those old stereotypes people have about Tesla and also addressing any concerns some customers may have had. You see, there were these reports before about data security issues with Tesla, as well as some challenges their models faced when trying to access certain places in China. 

To clear up any doubts, Tesla set up the Tesla Shanghai Data Center in 2021 to store data locally. On top of that, Tesla brought in third-party organizations to check its information security management system and got certified for its security management system (ISO27001). Moreover, Tesla publicly announced that it will gradually increase the number of local data centers to make sure all data from vehicle sales in China stays within the country. 

The China Association of Automobile Manufacturers announced in April this year that all models produced at Tesla's Shanghai Gigafactory meet the four compliance requirements for automotive data security. This report is seen as proof that Tesla follows the rules on data processing security. 

The original sentence has been polished to make it more colloquial: "Tesla has also said that they've met all the security requirements for handling automotive data in China, which will make it much easier for government agencies, airports, highways, and others to impose restrictions on Tesla. This also gets rid of the biggest problem Tesla had in developing their business in China. 

According to information available to the public worldwide, government departments in multiple countries and regions have started using Model Y and Model 3 as different types of official vehicles in their day-to-day operations. This includes using them as police cars, fire trucks, medical service vehicles, and security patrol cars. 

FSD/Car Insurance may develop smoothly

It's worth noting that back in April this year when Tesla CEO Musk made his speedy visit to China, it just so happened to coincide with the release of automotive data security by the China Association of Automobile Manufacturers. At this crucial moment, some industry insiders suggested that Musk's visit would help speed up the localization of Tesla's FSD system in China. 

Since the start of the year, Tesla has been dropping hints that FSD will soon hit the Chinese market. The local market is also pretty hyped about it. During Tesla's Q2 earnings call in July this year, Musk once again confirmed that FSD will be rolling out in China, Europe, and other countries by the end of this year on version 12.5 or 12.6. 

Tesla hasn't announced yet when FSD will be available in China, and the official disclosure of the specific launch time is still pending. However, industry insiders believe that Tesla's introduction of FSD into China is a sure thing; only the timing remains uncertain. Nonetheless, it's expected that Tesla will gradually get included in various government procurement catalogs, which also help pave the way for FSD's entry into the Chinese market to some extent. 

According to Tesla's Safety Report, when it comes to how safe this technology is, thanks to its Autopilot driving assistance system and FSD full self-driving suite, there's an average of one traffic accident for every 1.08 million kilometers driven under normal conditions in the US. However, Tesla vehicles with Autopilot's autonomous driving feature turned on, can go a whopping 11.07 million kilometers before encountering a traffic accident. 

Meanwhile, Tesla has once again taken part in the insurance game in China, aiming to promote its insurance services. On July 30th, Tesla Insurance Broker (China) Co., Ltd. officially got registered with a capital of RMB 50 million, specializing in helping people find the right insurance coverage. 

This is Tesla's second time registering an insurance company in China. In the middle of 2020, Tesla tried to set up a local insurance company, but they faced all sorts of policy and regulatory hurdles that kept them from getting the green light for an insurance brokerage license for a long time. Finally, they wrapped things up and canceled the whole deal this April. 

The Insurance for new energy vehicles is a big part of the automotive industry's ecosystem. Tesla's crazy high premiums during the reform of new energy vehicle insurance caused quite a stir in the industry and left consumers pretty unhappy. Tesla's latest move in the insurance field has caught a lot of attention from the market. 

Elon Musk has said that Tesla plans to launch a car insurance service that is more affordable, better, and even "revolutionary." Right now, Tesla's Usage-Based Insurance (UBI) car insurance is already up and running in multiple states across the US. 

It's worth mentioning that Tesla's insurance agency is just a brokerage firm. Although they don't have the qualifications to create insurance products themselves, they can work with insurance companies to design exclusive policies tailored to consumers' specific needs and situations. 

Some insiders in the car insurance industry think that this brokerage business might just be the start of Tesla's venture into car insurance in China. It's also possible that they could eventually pursue licenses for higher-value property insurance to make use of their experience and advantages in UBI car insurance. 

Additionally, it is worth mentioning that the domestic independent brand BYD has taken the lead in exploring vehicle property insurance and has received positive feedback thus far. This could pave the way for Tesla to discover a suitable insurance solution for the Chinese market. 

After meeting the data security and compliance requirements, Tesla is slowly getting into the government market, which will benefit FSD as it enters its final phase. Moreover, by stepping into the insurance industry, Tesla can address consumers' concerns about expensive premiums. These factors contribute to Tesla's positive growth in the Chinese market. Before this, based on data from the Joint Conference on Passenger Vehicle Market Information, Tesla's Model Y has consistently been named the top-selling new energy passenger vehicle in China. 

Translator：Wei Xiong