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Tesla considers opening its first plant in China

Staff Writer | June 24, 2017
Tesla confirmed that it is considering opening its first plant in Shanghai in China to cater to the growing Chinese market.
Auto industry   The Silicon Valley auto maker
In a statement, the Silicon Valley auto maker confirmed it is exploring with Shanghai authorities the possibility of opening a plant to build electric cars for China, a big consumer of luxury vehicles.

“Tesla is deeply committed to the Chinese market, and we continue to evaluate potential manufacturing sites around the globe to serve the local markets,” the company said in a statement cited by several US media sources.

“While we expect most of our production to remain in the US, we do need to establish local factories to ensure affordability for the markets they serve,” the statement added.

The company did not confirm recent reports by Bloomberg that it has signed a preliminary agreement with the Shanghai authorities to manufacture vehicles there.

China, which accounted for 15 percent of Tesla’s revenue in 2016, wants to boost the use of electric vehicles, which could open up an interesting market for Elon Musk’s company.

According to Chinese law, Tesla would have to form a joint venture with a local company to be able to manufacture in Shanghai and, according to Bloomberg, negotiations with the Chinese city would help the American company to avoid a 25 percent import tax on its vehicles and make them more competitive in China.