Tesla speeds up its expansion plans in China, chooses a site and a partner image

The electric carmaker is said to have already chosen a site and a manufacturing partner in China to soon begin building electric cars in the world’s largest market.

Tesla has been eying China for a long time as an appropriate place where to build its cars and where to seize the huge growth opportunities offered by the world’s largest auto market. Furthermore, China is expected to soon become the biggest one for electric vehicles as well, as new green-car sales have picked up some impressive pace last year. Finding a local partner to share production capacity would help the automaker avoid import tariffs of at least 25 percent and hit its goals of keeping a “global pricing” policy. At the same time, it would enable the company to follow the regulations that stipulate that a limit of 50 percent is mandatory for foreign-owned automakers.

Bloomberg now reports that Jinqiao Group, a Shanghai government-owned company, has signed a non-binding memorandum of understanding with Tesla on building its production facilities in the city. According to an insider familiar with the talks, both sides may invest around 4.5 billion dollars each, with Jinqiao putting up land for most of its share. An auto analyst at Bloomberg Intelligence said “the investment will probably include a nationwide dealership network, superchargers, R&D center and potentially a second ‘Gigafactory.”

Robin Ren, vice-president of Tesla and president of its Asia-Pacific region, recently told China Daily that the electric Model X SUV would be available for order in China near the end of this month, way sooner than initially intended, while the upcoming Model 3 is expected to be locally launched sometime at the beginning of 2018.

Via Bloomberg