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| 14 May, 2018

Tesla to start first overseas plant in China

Announcement came after the Chinese govt said that it would lift restrictions for foreign carmakers, which limited their ownership in JVs to 50%

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Gettyimages/ Justin Sullivan / Staff
Mubahser: Electric vehicle manufacturer Tesla established its first factory overseas in the Pudong New District of Shanghai on May 10, documents from the business official database in China showed on Monday.

The filing stated that the new company would operate under the name of Tesla Shanghai Co. Ltd., with a registered capital of CNY 100 million ($15.8 million).

Tesla’s Hong Kong subsidiary was identified in the documents as the sole owner of the new company, indicating that the US electric automaker plans to operate independently in China, away from a joint venture (JV) with local partners.

In an earnings call on 2 May, Tesla’s CEO Elon Musk said that the company was about to announce a new “Gigafactory” that would manufacture batteries and vehicles in China.

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The announcement came after the Chinese government said in April that it would lift restrictions for foreign carmakers, which limited their ownership in JVs to 50%.

Foreign automakers manufacture vehicles in China under JVs in order to avoid the 25% tariffs imposed on imported cars.

Tesla has been unwilling to enter into a JV with a Chinese partner, which would put its proprietary technology at risk.

Source: Mubasher

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