Tesla Reportedly Close To Operating Its Own Manufacturing Facility In China


USA electric carmaker Tesla has struck a deal with the Shanghai Government to build its first factory in China, representing a significant milestone in its attempts to establish a presence in the world's largest electric vehicle market. At the time, the company said it hoped to reach a deal by year's end.

While the move would reduce Tesla's production costs, it will likely have to pay the 25% import duties that the Chinese government imposes on foreign auto makers, the WSJ report notes. The Chinese government wouldn't set such a precedent without careful consideration, though it did circulate a proposal on possibly allowing foreign EV makers to circumvent the partner rule if they build their operations in the country's free trade zones.

Tesla will have to pay a 25 percent duty on cars built in a free-trade zone, but the firm can still enjoy lower production costs.

In a bid to gain traction in China's growing electric vehicle market, Tesla is setting up a manufacturing facility in Shanghai, according to the Wall Street Journal.

It's not like Tesla is the only electric vehicle company that's thinking about the future of electric cars in China.

"We continue to evaluate potential manufacturing sites around the globe to serve the local markets". What was not known until now is that Tesla will be the sole owner of the factory.

Shares of Tesla Inc (NASDAQ: TSLA) gained more than 1 percent early Monday morning after the company reportedly struck a deal with China to build new facilities in the country.

China's home-grown manufactures now produce 43% of total vehicle sales in China but 96% of all-electric vehicles.

The Model 3 is the luxury electric vehicle maker's newest auto, and Consumer Reports said it had no data on the vehicle.

In September, Electrek reported that a new Tesla Supercharger station, slated to become the biggest in the world once completed, is under construction in the basement of Pudong's Lilacs International Commercial Center.

The increase in borrowing capacity will give the Tesla the ability to offer consumers better lease deals as it scrambles to break bottlenecks that have dogged production of its newest and most affordable vehicle, the Model 3.

The Palo Alto, California-based carmaker is working with the local government on the timing and details of an announcement, the people told the newspaper. The Chinese government is aiming to sell seven million electric vehicles a year by 2025.