Tesla Narrowing in on Shanghai Factory

Tesla Narrowing in on Shanghai Factory

Tesla Narrowing in on Shanghai Factory

Called Tesla (Shanghai) Co Ltd, the firm will focus on electric cars, spare parts and batteries, as well as the development of photovoltaic products. "We don't have anything new to add on this registration for now", a Tesla spokeswoman told Reuters on Monday.

The office did not give further details of the partners or disclose the shareholder structure of the planned joint venture, but according to reports in The Shanghai Securities News and the South China Morning Post, it is reported that FWD would take 51% of the venture, the maximum China would now allow under the new policy introduced by the Chinese government recently. That is not almost enough to build a factory, but a start nonetheless.

Tesla boss Elon Musk has already said that the next Gigafactory will be in China, although the official announcement isn't expected until the third quarter of this year.

Tesla has set up a wholly-owned subsidiary in Shanghai, marking the latest step in the company's steady march toward setting up a factory inside China, the world's biggest market for electric cars. China sold 777,000 new-energy vehicles in 2017, a 53 percent increase over 2016.

Last year, China rolled out a plan to eliminate internal combustion engines in cars by 2040.

The location of Tesla's newly established Shanghai company is at Lingang, an area close to the city's free-trade zone. What's more, China continues to become an increasingly important market for electric auto manufacturers and in the past year, EV sales have increased by 149 per cent. Plug-in-hybrid vehicle sales are booming in the country.

The South China Morning Post in February reported that Tesla had threatened to shift its presence away from Hong Kong after the government briefly eliminated incentive programs that reduced the effective sale price of electric vehicles.

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