Tesla looks set to establish an electric car production plant in China, with the manufacturer confirming it is in exploratory talks with the Shanghai municipal government.
While Tesla’s revenues from China jumped more than four-fold in the first quarter of this year and now account for 19 per cent of the company’s sales, Tesla’s CEO Elon Musk believes far more could be gained from the Chinese market.
Tesla is also keen to offer electric cars in China which can avoid the 25 per cent tariff imposed on imported vehicles. China's central government requires foreign companies like Tesla to have a Chinese partner in new auto manufacturing ventures, with the foreign company owning no more than 50 per cent.
It has yet to be revealed when Tesla is expecting to have a plant in China, or what Chinese manufacturing partner the brand could partner up with. However, Tesla has said it expects to “more clearly define” its China production plans by the end of the year.
Cars which Tesla may build in China include the upcoming Model 3 and Model Y.
