Tesla to build wholly owned Shanghai plant

Tesla to build wholly owned Shanghai plant

Tesla to build wholly owned Shanghai plant

Neither Tesla nor Shanghai officials have yet confirmed report, but the automaker had previously said it was in discussions with the city and that it would have Chinese production plans "clearly defined" by the end of the year. This arrangement, the first of its kind for a foreign auto maker, could enable Tesla to slash production costs, but it would still likely incur China's 25% import tariff. That followed the announcements that Tesla sold $1 billion worth of cars in China in 2016 and that it had accepted a large investment from Tencent Holdings, a technology giant in China.

Tesla has reportedly reached a deal with the government of Shanghai to build a manufacturing facility in the region. By setting up a factory in the city's free trade zone, Tesla also could reduce production costs significantly.

Halfway through 2017, Tesla sales in China reached almost $1 billion, compared to $2.8 billion in its home market of the United States.

China has World's largest electric-vehicle market already and it is expected that it would continuously grow fast. That involves profit sharing and giving away some technology.

Tesla is brawling with production problems at its main factory in Fremont, California.


China's home-grown manufactures now produce 43% of total vehicle sales in China but 96% of all-electric vehicles. "While we expect most of our production to remain in the USA, we do need to establish local factories to ensure affordability for the markets they serve", it said.

The report did not offer details on when a deal might be announced.

The company's well known vehicle models included Tesla Roadster, Tesla Model S, Tesla Model x and Tesla Model 3. A Tesla spokesperson declined to comment.

Tesla has opened its massive 50-stall Supercharger station that's located at the Lilac International Business Center in Shanghai, China. According to Bloomberg, the Chinese government debuted a new set of emission rules last month that would require all carmakers to produce zero- and low-emission vehicles beginning in 2019.

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