Shanghai sources have reported that Tesla has reached an agreement with Shanghai authorities that would make it the first foreign automaker to build its own plant in China, putting it in the driver's seat in the world's biggest electric-vehicle market.
Sources have stated that the Silicon Valley electric carmaker's wholly-owned manufacturing facility would be built in Shanghai's free-trade zone, the Wall Street Journal said, quoting unnamed sources with knowledge of the deal, and could allow Tesla to dramatically lower the cost of its cars in China.
Sources stated that China usually requires foreign automakers to set up joint ventures with local Chinese partners, which involves splitting profits and giving away some technology, though they also avoid import tariffs. Tesla or the Shanghai government was not immediately available for comment.
According to sources, more than half a million "new-energy" cars were sold in China last year, and the government is targeting sales in the millions in coming years. The Wall Street Journal added that any cars built by Tesla in the free-trade zone would still incur a 25% import tariff.
