Tesla to Set Up Its First Chinese Production Plant

India bound Tesla Model 3 launched-2

Tesla in talks with Chinese authorities to set up its first factory in the country; could become the Asian production hub

American electric vehicle manufacturer Tesla is nearing to set up its first production plant in China. The EV maker is in talks with the Chinese authorities and the final announcement of the agreement could be announced in this week. With the local production in new factory, Tesla aims to take lead in the biggest EV market of the world.

If things go well, then the Tesla production plant is expected to be set up in the Lingang development zone in China. Under the current rule, Tesla needs to enter into a joint venture with a Chinese company to set up its factory there. However, it is not clear which company is going to be Tesla’s local partner there.


Also read: Tesla Model 3 Revealed Fully in Spy Images; Battery Cell Production Begins

China is currently the biggest market for electric vehicles since 2015, with the government aggressively pushing the electric mobility strategy. Tesla experienced its revenue tripled to more than $1 billion in China in 2016, which certainly inspired it to prompt for the local production. Also, with local production the American EV maker will be able to save the 25% import tax on its vehicles.

Currently, Tesla sells both its Model S and Model X in the Chinese market and the upcoming more affordable Model 3 will be sold there as well. With the upcoming Model Tesla is expecting to experience a boost in its sales in the Chinese market. It aims to sell 5 lakh vehicles in the country per annum and the upcoming compact electric sedan could play a crucial role for that strategy to be successful.

Tesla Model X

Tesla is also aiming at Indian market as it is going to be one of the potential big markets for electric vehicles within couple of years. The company is already in talks with Indian government for temporary tax benefit on importing cars here before it sets up the production plant in the country. The Model 3 is going to be the first Tesla car to be launched here.

Tesla Model 3 Gallery

Source: Bloomberg