Tesla on its Way to Build Cars in China
Elon Musk’s Tesla Inc has taken a step forward with an announcement regarding exploratory talks with Shanghai’s municipal government relating to the establishment of an electric vehicle manufacturing plant.
Tesla wants to build EVs in China, just to avoid the 25 percent tariff on imported cars.
Even though the company hasn’t set a timeline yet, it expects to define it more clearly by the year end.
According to the China’s central government, foreign companies like Tesla need to partner with a Chinese firm in the case of auto manufacturing ventures. The maximum percentage of investment is set at 50 percent.
Tesla hasn’t yet mentioned the likely partner, but there has been a lot of discussions online regarding the same. Although a lot of speculation has been centered around Tencent Holdings Ltd, China’s largest company, and an Internet giant. Tencent had acquired a five percent stake in the Tesla Inc earlier this year for a sum of $1.8 billion.
Tesla hasn’t given a basic hint regarding which model it will look to build in the China, but a source indicated that the Model 3 and Model Y are most likely options.
Tesla has gained a lot of recognition and value in the past few years over its innovation. Its Model X recently was awarded a five-star rating in crash testing.