Tesla Opens Its First Foreign Factory In China

Tesla has registered a company in Shanghai, it is a step towards the opening of the first foreign plant of the brand. Tesla’s Hong Kong division is identified as the sole owner of the new company, the Wall Street Journal reports.

The new company called Tesla Shanghai Co. Ltd. was established on May 10, 2018 in the New Pudong District (Shanghai). It is capitalized at 100 million yuan ($15.8 million).

It is evident Tesla does not want to share its technologies and does not intend to establish a joint venture with a Chinese partner, as other automakers do to avoid a 25 percent import tariff.

Last year the press wrote that Tesla had agreed to open a factory in Shanghai. It was expected that this would be officially announced at the end of 2017, but due to administrative delays from the Chinese authorities, the procedure for concluding the deal was delayed.

The USA even had to press on China, so that the latter somewhat weakened its demands on foreign companies that enter the Chinese market. In response to US pressure, Chinese President Xi Jinping promised last month to lift restrictions under the joint venture rules and reduce import tariffs.

This may mean a ‘green light’ for Tesla. However, experts predict that for the organization of production in China it will take about 3 years, plus without a Chinese partner, there may be difficulties with the creation of a local supply chain.

China is a lucrative niche market for Tesla, which sells its imported cars in wealthy Beijing and Shanghai. As the Chinese government actively promotes electric vehicles, the Californian company will have even more opportunities in this country.

Photo: 2018 Tesla Model 3