Now playing
01:53
How Tesla made electric cars sexy
Scene video following a crash involving a Tesla Saturday night in Spring, TX
Scott Engle
Scene video following a crash involving a Tesla Saturday night in Spring, TX
Now playing
00:55
Fatal Tesla crash had no one in the driver's seat, police say
Tesla CEO Elon Musk speaks during the unveiling of the new Tesla Model Y in Hawthorne, California on March 14, 2019. (Photo by Frederic J. BROWN / AFP)        (Photo credit should read FREDERIC J. BROWN/AFP via Getty Images)
FREDERIC J. BROWN/AFP/AFP via Getty Images
Tesla CEO Elon Musk speaks during the unveiling of the new Tesla Model Y in Hawthorne, California on March 14, 2019. (Photo by Frederic J. BROWN / AFP) (Photo credit should read FREDERIC J. BROWN/AFP via Getty Images)
Now playing
03:06
SEC: Elon Musk officially named 'Technoking of Tesla'
Bitcoin
CNN
Bitcoin
Now playing
03:17
Tesla invests $1.5 billion in bitcoin
CNN
Now playing
03:14
In 2010, Elon Musk had big plans for Tesla. Listen to his predictions
Tesla co-founder and CEO Elon Musk introduces the newly unveiled all-electric battery-powered Tesla Cybertruck at Tesla Design Center in Hawthorne, California on November 21, 2019. (Photo by Frederic J. BROWN / AFP) (Photo by FREDERIC J. BROWN/AFP via Getty Images)
FREDERIC J. BROWN/AFP/Getty Images
Tesla co-founder and CEO Elon Musk introduces the newly unveiled all-electric battery-powered Tesla Cybertruck at Tesla Design Center in Hawthorne, California on November 21, 2019. (Photo by Frederic J. BROWN / AFP) (Photo by FREDERIC J. BROWN/AFP via Getty Images)
Now playing
02:01
Elon Musk has a lot to say about Covid-19. Some of it isn't true
Tesla Cybertruck
Tesla
Tesla Cybertruck
Now playing
01:36
Watch the Tesla Cybertruck's unbreakable windows break
Brussels, Belgium, Jan 18, 2019: metallic red Tesla Model 3 and blue Tesla model X at Brussels Motor Show.
Grzegorz Czapski/Shutterstock
Brussels, Belgium, Jan 18, 2019: metallic red Tesla Model 3 and blue Tesla model X at Brussels Motor Show.
Now playing
03:33
Analyst: We see good things happening with Tesla
Now playing
01:09
Elon Musk busts a move in Shanghai
Gabe Ramirez/CNN
Now playing
01:19
See Tesla's new Model Y
Sean R Clark/CNN
Now playing
03:16
Tesla's Model 3 is a top seller. But it's not the electric car for everyone
Bloomberg/Getty Images
Now playing
03:21
Hear some of Elon Musk's most ambitious predictions
CHICAGO, IL - JUNE 14: Engineer and tech entrepreneur Elon Musk of The Boring Company listens as Chicago Mayor Rahm Emanuel talks about constructing a high speed transit tunnel at Block 37 during a news conference on June 14, 2018 in Chicago, Illinois. Musk said he could create a 16-passenger vehicle to operate on a high-speed rail system that could get travelers to and from downtown Chicago and O'hare International Airport under twenty minutes, at speeds of over 100 miles per hour. (Photo by Joshua Lott/Getty Images)
Joshua Lott/Getty Images North America/Getty Images
CHICAGO, IL - JUNE 14: Engineer and tech entrepreneur Elon Musk of The Boring Company listens as Chicago Mayor Rahm Emanuel talks about constructing a high speed transit tunnel at Block 37 during a news conference on June 14, 2018 in Chicago, Illinois. Musk said he could create a 16-passenger vehicle to operate on a high-speed rail system that could get travelers to and from downtown Chicago and O'hare International Airport under twenty minutes, at speeds of over 100 miles per hour. (Photo by Joshua Lott/Getty Images)
Now playing
00:53
Musk opens up about Tesla's near 'death'
Now playing
01:04
Hear Elon Musk's bold predictions for Tesla robotaxis
Elon Musk's Power Cut_00013520.jpg
Elon Musk's Power Cut_00013520.jpg
Now playing
02:41
Investor: Have to take 'good and bad' with Elon Musk
(CNN Business) —  

Elon Musk is returning from China with a tax break for his electric car company.

Chinese authorities announced on Friday that Tesla (TSLA) has won an exemption from a 10% purchase tax, which will reduce the price that customers will have to pay for a Model 3, Model S or Model X.

Thirty-four carmakers were on the exemption list, which was released by the Ministry of Industry and Information Technology and State Taxation Administration. The list mainly applies to cars made by joint ventures between Chinese and foreign companies, like Daimler (DDAIF) and Toyota (TM). Tesla is the only foreign manufacturer being granted an exemption on its own.

The exemption is designed to benefit companies that make cars using new forms of energy, like electric vehicles. It applies both to cars made in China, as well as imported ones.

The tax break was announced the same day Musk met with Chinese Transport Minister Li Xiaopeng, according to a statement posted on social media by the Transport Ministry.

The deal is significant in part because of how the US-China trade war has escalated. Beijing announced last month that it plans to resume tariffs of 25% on US imports of automobiles and 5% automobile parts in December.

While Tesla has plans for a major facility in China, it still relies on its main plant in Fremont, California to produce vehicles for the world’s biggest car market. In the past, the company has slashed its prices to absorb the cost of Chinese tariffs.

Tesla's Gigafactory under construction in Shanghai, China.
VCG via Getty Images
Tesla's Gigafactory under construction in Shanghai, China.

The carmaker has ambitious plans for China. A new manufacturing plant in Shanghai — Tesla’s Gigafactory — has been under construction since the start of the year. It’s the company’s first factory outside the United States. It’s also the first time China has let a foreign automaker open a plant in the country without a local partner.

Musk told analysts on a July earnings call that he expects the long-term demand for the Model 3 at that factory to be about 5,000 units per week. The Model 3 is Tesla’s best-selling car.

Speaking at a conference in Shanghai with Alibaba (BABA) chairman Jack Ma on Thursday, Musk said he was in town to visit the factory and was impressed by the progress he’d seen so far.

Tesla’s China team has done a “mind-blowing” job, Musk said. “I’ve never seen anything built so fast in my life before, to be totally frank. And I’ve seen some crazy things … I really think China is the future.”