The Tesla will be produced in China

The Tesla will be produced in China

The company is a manufacturer of electric cars Tesla Inc. said on Sunday that talks with Shanghai authorities about the deployment of its plant for the production of electric cars in the region. The construction plan was supposed to be agreed by the end of this year. At the same time, the company’s representatives refuse to confirm the conclusion of the construction agreement as valid.

It is known that China charges 25 percent duty on the sale of imported cars and does not allow foreign automakers to create the world’s biggest car market, factories with 100% equity ownership rights. It is this rule that is the problem for Tesla isplanning to expand its presence in the growing market of electric vehicles in China.

The Tesla will be produced in China

Recently the government decided to allow foreign automakers to build entire factories and plants, but only in free trade zones, partly to stimulate the production of electric and hybrid vehicles, which the government calls «new energy vehicles». The purpose of this decision is to increase sales, to encourage the transition of the population to electric cars to combat pollution of the environment and implement ambitious plans for even more growth the Chinese car market.

If the company will manage to conclude an agreement on the construction of the plant – it will still be forced to pay 25% duty on cars manufactured in the free trade zone, however, will be able to significantly reduce the cost of manufacture using cheap labour and purchasing local raw materials.

In the Chinese market, the interests of the Tesla presents resident company Tencent Holdings Ltd, which owns a 5% stake in the U.S. automaker.

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