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© Tesla Electronics Production | October 23, 2017

Tesla: One step closer to producing cars in China

The electric car maker has reaffirmed that it is talking with the Shanghai municipal government regarding the set up of a factory in the region.
The company expects to reach an agreement on a plan by the end of the year, Reuters reports.

China is one of the biggest and fastest moving auto market in the world, and a factory in the region could assist the electric car maker in gaining some traction in the country’s EV market.

In the past China has not allowed foreign automakers to have wholly owned factories within the country; but in bid to encourage more production of electric and hybrid vehicles the Chinese government has considered allowing the set up wholly owned factories in free trade zones.

However, even with a Tesla factory in a free trade zone, the company would still have to pay a 25% duty – China charges a 25% duty on sales of imported vehicles – but a Chinese factory could still lower the company’s production costs.

Tesla did not comment further on the matter and referred media to a statement it made in June that the company “is working with the Shanghai Municipal Government to explore the possibility of establishing a manufacturing facility in the region to serve the Chinese market. As we’ve said before, we expect to more clearly define our plans for production in China by the end of the year,” the report continues.

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November 14 2017 8:30 PM V8.8.9-2