Update: Tesla Gets Green Light for Shanghai Factory
*Establishment of new company seen as preliminary step toward Tesla’s goal of producing electric cars in municipality
*Announcement follows central government’s new rules that will allow foreign carmakers to eventually assume full ownership of their local ventures
(Beijing) — U.S. electric car startup Tesla Inc. has received tentative approval from the Shanghai government to manufacture cars in the city, sources familiar with the matter told Caixin.
Tesla’s factory would be in the Lingang industrial zone in the city’s Pudong New Area, a source close to the Shanghai authorities told Caixin.
However, the agreement — signed this month — is only a letter of intent, meaning it is not legally binding, according to another source familiar with China’s policymaking.
Tesla did not respond to Caixin’s requests for comment.
Earlier this month, Tesla established a new company in the city to offer services, including research and development, as well as engage in the import and export businesses.
The establishment of the new company, Tesla (Shanghai) Ltd., is widely seen as a preliminary step toward Tesla Inc.’s goal of producing electric cars in the city. Tesla founder and CEO Elon Musk has said his company plans to announce the location of a plant in China as early as the third quarter of this year.
The company had been negotiating with the Shanghai government last year to open an assembly plant in the city, but the plan stalled, reportedly due to disagreements over the ownership structure.
The establishment of the new company came soon after Beijing rolled out rules to open China’s car market by allowing foreign automakers to take full ownership of their local ventures in the coming years.
The new policies, which will abolish the current 50% foreign-ownership cap on electric vehicle manufacturing by the end of this year, are widely said to benefit electric car producers like Tesla.
China has over the years promoted the development of new-energy vehicles with enormous government incentives — including subsidies and tax rebates — helping it hold on to the title of the world’s largest electric market since 2015.
Tesla has identified the country as its most important market after its home base of the U.S., where it sold 17,000 units last year, accounting for 16.5% of its global sales, according to the China Automobile Dealers Association.
However, all Tesla vehicles sold in China were imports. Even though Beijing has significantly lowered the car import tariffs, Tesla’s vehicles still retail at much higher prices in China than in the U.S.
Tesla’s Model S 75D, for example, costs 710,000 yuan ($111,000) in China, nearly double its $60,200 sticker price in the U.S.
Contact reporter Mo Yelin (email@example.com)
Aug 03 18:29
Aug 03 16:27
Aug 03 14:01
Aug 03 13:36
Jul 31 19:01
Jul 31 18:05
Jul 31 17:55
Jul 31 17:10
Jul 31 14:47
Jul 30 19:35
Jul 30 18:56
Jul 30 17:59
Jul 30 17:11
- 1Alibaba’s Newspaper in Hong Kong Plans to Reinstall Its Paywall System
- 2Beijing Reports New Covid-19 Case as Northeastern Outbreak Spreads to Nine Cities
- 3In Depth: China’s Exporters Find 1.4 Billion Domestic Consumers Are a Tough Sell
- 4Gallery: Chongqing Submerged
- 5China Pushes Local Governments to Borrow $220 Billion by Oct. 31
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas