China’s Ministry of Industry and Information Technology (MIIT) has placed Tesla’s Shanghai-made Model Y on a list that grants new energy vehicles exemption from purchase tax, signaling that the U.S. automaker should soon start selling the electric sports utility vehicle in China, a market which it sees as one of its most important revenue sources.

The approval comes three months after Tesla began accepting Chinese pre-orders for Model Y cars that are expected to be produced at the company’s Shanghai plant as early as next year.

The China-built Model Y comes in two versions: “long-range” and “performance”. The long-range version can travel 505 kilometers on a single charge and accelerate from 0 to 100 kph in 5.1 seconds, while the performance version can travel up to 480 kilometers and accelerate to 100 kph in only 3.7 seconds. The two versions are estimated to hit the market for 488,000 yuan ($70,600) and 535,000 yuan respectively, according to Tesla’s China website.

In January, Tesla caught the attention of global media with deliveries of its first Shanghai-assembled Model 3 electric sedans to Chinese buyers. In October, the domestically-built Model 3 claimed the title of China’s second most popular electric vehicle model with 12,143 cars sold in the country, according to the China Passenger Car Association (CPCA).

Contact reporter Ding Yi (yiding@caixin.com)

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