Tesla reaffirms effort to build cars in China; mum on deal report

Latest news

    (Reuters) – Electric car maker Tesla Inc (TSLA.O) reaffirmed on Sunday it is talking with the Shanghai municipal government to set up a factory in the region and expects to agree on a plan by the end of the year, but declined to comment on a report that a deal has been reached.

    FILE PHOTO: Tesla Model 3 cars are seen as Tesla holds an event at the factory handing over its first 30 Model 3 vehicles to employee buyers at the company’s Fremont facility in California, U.S. on July 28, 2017. Courtesy Tesla/Handout via REUTERS

    China levies a 25 percent duty on sales of imported vehicles and has not allowed foreign automakers to establish wholly owned factories in the country, the world’s largest auto market. Those are problems for Tesla, which wants to expand its presence in China’s growing electric vehicle market without compromising its independence or intellectual property.

    China’s government has considered allowing foreign automakers to set up wholly owned factories in free trade zones in part to encourage more production of electric and hybrid vehicles – which the government calls “new energy vehicles” – to meet ambitious sales quotas.

    Tesla would still have to pay a 25 percent duty on cars built in a free trade zone, but it could lower its production costs.

    Tesla on Sunday pointed to a statement it made in June that the company “is working with the Shanghai Municipal Government to explore the possibility of establishing a manufacturing facility in the region to serve the Chinese market. As we’ve said before, we expect to more clearly define our plans for production in China by the end of the year.”

    A Tesla spokesperson in the United States declined to comment further beyond referring to the June statement.

    The Wall Street Journal reported that Tesla and the Shanghai government have reached a deal in that city’s free trade zone. Shanghai is China’s de facto automotive capital and a significant market for luxury vehicles of all kinds.

    Chinese internet company Tencent Holdings Ltd(0700.HK) has a five percent stake in Tesla and is seen as a potential ally for Tesla’s efforts to enter the Chinese market.

    It was unclear if the Chinese government will conclude a deal with Tesla to coincide with U.S. President Donald Trump’s visit next month.

    Tesla Chief Executive Elon Musk has said the company eventually will need vehicle and battery manufacturing centers in Europe and Asia.

    View the original article: http://feeds.reuters.com/~r/reuters/technologyNews/~3/zIEUFjBolgQ/tesla-reaffirms-effort-to-build-cars-in-china-mum-on-deal-report-idUSKBN1CR0ME

    Tesla is wrestling with production problems at its sole factory, in Fremont, California. It is trying to accelerate output of its new Model 3 sedan, but conceded earlier this month that production bottlenecks had held third-quarter production to just 260 vehicles, well short of the 1,500 previously planned.

    Reporting by Joe White and Nori Shirouzu; Editing by Dan Grebler

    Our Standards:The Thomson Reuters Trust Principles.

    In the same category are

    BASF, Nornickel join forces in electric vehicle battery push FRANKFURT/MOSCOW (Reuters) - Germany’s BASF and Russia’s Norilsk Nickel (Nornickel) have signed a nickel and cobalt supply deal to address growing dem...
    ZF takes 35 percent stake in autonomous driving specialist ASAP FRANKFURT (Reuters) - Car parts maker ZF Friedrichshafen said on Friday it acquired a 35 percent stake in ASAP, a Germany-based maker of software and ...
    Comcast says its fastest internet reaches more U.S. homes than any other provider (Reuters) - Comcast Corp said on Thursday that its fastest-speed gigabit internet service now reaches more homes than any other provider in the United...
    China robot market growth to slump this year as trade war weighs TOKYO (Reuters) - Sales of industrial robots in China, the world’s biggest market, will grow this year at only about a third of last year as an escala...
    Fintech making inroads, but U.S. bank revenues little changed: report NEW YORK (Reuters) - Financial technology startups and other new entrants are making inroads in the U.S. banking market, but have yet to capture a thr...
    Realpage settles U.S. charges over tenant screening reports (Reuters) - Realpage Inc, which provides technology to the real estate industry, agreed to pay $3 million to settle charges that its tenant screening ...

    Leave a comment

    Your email address will not be published. Required fields are marked *

    This site uses Akismet to reduce spam. Learn how your comment data is processed.