Leaked document sparks rumors of a Tesla factory coming to China
Rumors about a Tesla factory being built in China are circulating after a leaked document reportedly revealed plans for a joint venture between Tesla and a Chinese partner.
According to local news outlet Caixin, Tesla could be planning to build a factory in China aimed at producing 500,000 vehicles annually for the Chinese market. Caixin reports that it was contacted by an anonymous source who claims Tesla “still hasn’t made a final decision, but the possibility (of a production base) in Lingang port in Shanghai is the strongest.” The source reportedly has close ties to the Shanghai government. But another source tells Caixin Global that Tesla is in talks with potential partners in several other cities, including Suzhou, Hefei, and Guangzhou.
Tesla has refused to be drawn into the speculation. Its office in China indicated the leaked document was false. “Tesla is deeply committed to the Chinese market, and the rumors that are circulating are untrue,” the company said. That may not be enough to make the rumors go away, however. In Beijing last month. Tesla’s head of Asia operations, Ren Yuxiang, told an audience that Tesla wants to be a true Chinese company, a “China Tesla,” he said, rather than just “Tesla China.” He added the company has plans to open a research and development center in China soon.
China is now the world’s largest new car market with more than 21 million new cars sold per year. The Chinese government is a strong supporter of what it calls “new energy vehicles,” a term that includes hybrids, plug-in hybrids, and battery electric cars like Tesla’s Model S and Model X. There is every reason why Tesla may want to be part of the largest automobile market in the world. By producing vehicles in China, Tesla would be able to skirt heavy import taxes imposed by the Chinese government, thus making its cars more price competitive with domestically produced vehicles.
Having a Tesla factory in China may not be too far-fetched of an idea. It can actually be a crucial move to secure Tesla’s long term strategy for the Chinese market.
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