Published Date : Jun 21, 2016
Keeping with the Tesla Motors Inc.’s goal of significantly increasing the production of its vehicles over the next few years, the electric car maker is working on a US$9 bn joint venture in China, reports suggest, to establish a factory to locally manufacture vehicles in the country. Although the Bloomberg report has not yet been confirmed, a source close to the matter has said that Shanghai is at the top of the list of prospective cities for the Tesla Motors production base in China.
Jinqiao Group and Tesla Join Hands for Production Facilities
The Bloomberg report states that Jinqiao Group, a company owned by the Shanghai government, has signed a non-binding MoU with Tesla concerning the setting up of the production facilities in the municipality. Although the negotiations are still under wraps, it has been reported that each of the parties might be investing an estimated US$ 4.5 bn (amounting to around 30 billion yuan) in the partnership. Jinqiao will be putting in most of its share in the form of land. The new production factory to be set up in Shanghai will enable the electric car manufacturer avoid 25 per cent in import levy, the Bloomberg report has stated. This would make the company’s vehicles increasingly affordable in China.
Tesla’s Growing Interest in Setting up Shop in China
For Tesla, setting up a factory in the largest automobile market in the world is, without a doubt, a massive and significant move. It is also far from surprising that the company has decided to set up shop in China. Several executives in Tesla, including the chief executive officer Elon Musk, have, on previous accounts, expressed keen interest in setting up a production factory in the country. Last October, Musk wrote on Twitter that the Tesla Model 3 is due in roughly two years, with a factory in China in the following year to cater to the local demand.