Tesla to build its first e-car factory in China | Business| Economy and finance news from a German perspective | DW | 23.10.2017
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Tesla to build its first e-car factory in China

The luxury electric carmaker reportedly has reached an agreement with China to build a production facility in Shanghai's free-trade zone, potentially giving Tesla a unique edge in the world's largest e-car market.

Details of the deal, as reported Sunday by The Wall Street Journal (WSJ), were still being worked out, but the new factory would be wholly-owned by the Silicon Valley-based carmaker, sources with knowledge of the deal told the US business newspaper.

Tesla's factory would be the first of its kind for a foreign car manufacturer as it reportedly excluded a technology-sharing agreement. China usually requires foreign automakers to set up joint ventures with local Chinese partners, which involves splitting profits and giving away some technology.

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No timeframe for the launch of the Tesla plant was given. CEO Elon Musk said in 2015 that a factory in the country could cut the price of vehicles sold in China by a third. However, WSJ wrote that Tesla cars produced under the new factory deal were still likely to be considered "imports" and faced a 25 percent duty.

Tesla has been pursuing a Chinese factory for years, and the Shanghai deal started to come into focus in June. That followed the announcements that Tesla sold $1 billion (850 million euros) worth of cars in China in 2016, and that it had accepted a large investment from Tencent Holdings, a technology giant in China.

Read more: The race to e-mobility

China's electric-vehicle market is already the world's largest and is expected to continue growing fast, especially since the government plans to require that all automakers' sales include a certain percentage of electric vehicles from 2019.

Beijing is also mulling plans to ban fossil-fuel burning cars by an unspecified date, following decisions by France and Britain to outlaw the sale of such vehicles from 2040 to limit emissions.

uhe/jd (Reuters, AFP)


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