Photo: YouTube screenshot
Earlier this week, reports surfaced claiming that Tesla had struck a deal with the Shanghai Government for the development of local production facilities. Which is just fancy talk for Tesla starting to build cars in China.
The move itself comes as no surprise to anyone - China is still the biggest EV market in the world, and even though a large number of the cars sold belong to local brands and are very cheap - both literally and figuratively - there is definitely money to be had for Tesla over there.
In fact, Tesla's sales there have tripled in 2016 compared to the previous year, bringing over one billion dollars to the company's coffers. And that's without the added benefit of producing locally, which would spare Tesla of the 25 percent import tax that its products are currently carrying.
Amid the reports, Tesla has issued an official statement in which it confirms talks with the Shanghai representatives, but it didn't say anything about having signed any accord already. Whether that means the negotiations are still in an incipient form or the company just wants to wait until everything is sorted out completely remains to be seen.
“Tesla is working with the Shanghai Municipal Government to explore the possibility of establishing a manufacturing facility in the region to serve the Chinese market," the statement, sent to Electrek, read. "As we have said before, we expect to more clearly define our plans for production in China by the end of the year. Tesla is deeply committed to the Chinese market, and we continue to evaluate potential manufacturing sites around the globe to serve the local markets. 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 end of the year deadline coincides with the one set by Elon Musk for the announcement of the locations for the new Gigafactories, meaning one of them might be the one in the Shanghai region.
It also suggests that the plant would only build the cars needed for the Chinese market, easing worries that Tesla might turn into another high-value American brand that is just "designed in California," if you know what we mean.
In fact, Tesla's sales there have tripled in 2016 compared to the previous year, bringing over one billion dollars to the company's coffers. And that's without the added benefit of producing locally, which would spare Tesla of the 25 percent import tax that its products are currently carrying.
Amid the reports, Tesla has issued an official statement in which it confirms talks with the Shanghai representatives, but it didn't say anything about having signed any accord already. Whether that means the negotiations are still in an incipient form or the company just wants to wait until everything is sorted out completely remains to be seen.
“Tesla is working with the Shanghai Municipal Government to explore the possibility of establishing a manufacturing facility in the region to serve the Chinese market," the statement, sent to Electrek, read. "As we have said before, we expect to more clearly define our plans for production in China by the end of the year. Tesla is deeply committed to the Chinese market, and we continue to evaluate potential manufacturing sites around the globe to serve the local markets. 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 end of the year deadline coincides with the one set by Elon Musk for the announcement of the locations for the new Gigafactories, meaning one of them might be the one in the Shanghai region.
It also suggests that the plant would only build the cars needed for the Chinese market, easing worries that Tesla might turn into another high-value American brand that is just "designed in California," if you know what we mean.
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