Tesla Motors Inc (NASDAQ:TSLA) has inked a deal with China United Network (also known as China Unicom) to set up charging points for its vehicles. The Elon Musk-led EV manufacturer, in collaboration with China’s second-largest mobile company, is set to establish 400 charging points in 120 Chinese cities at China Unicom outlets, according to Tesla spokeswoman Peggy Yang.  Additionally, both companies are considering building 20 supercharging stations that will be 16 times faster, said Yang.

Tesla Supercharger

Deal to address major hurdle for Tesla

In its deal with the China Unicom, Tesla Motors Inc (NASDAQ:TSLA) will supply the equipment for the charging stations, and China Unicom will offer the land. Yang reserved comments on the cost that will be incurred and said that Tesla customers will be able to charge their cars for free.

“The deal represents our biggest investment so far in charging facilities in China,” Yang said in a telephone interview with Reuters.

The limited number of charging stations is being considered to be one of the major hurdles in the success of Tesla Motors Inc (NASDAQ:TSLA) in China, raising questions over Beijing’s ambition to put 5 million green vehicles on the road by 2020. The central government is said to provide 100 billion yuan in aid for setting up charging networks in a bid to ramp up demand for clean cars, says a report from Bloomberg which cites two sources familiar with the matter.

After the project with Unicom is complete, the EV manufacturer will be able to offer quick service to customers in almost every part of China. The EV manufacturer has also entered into a deal with real estate developers Soho China and China Yantai Holdings Co to built a network of charging points across properties in the nation.

Locally produce cars, a viable option

Elon Musk, the man behind the innovative car company, is eyeing the hundreds of millions of dollars investment in setting up charging stations in China, after which the company will be aggressively armored to compete with foreign rivals such as BMW and Daimler AG, along with offering faster delivery to Chinese customers, who are baffled about late deliveries.

The Palo Alto-based clean vehicle manufacturer, under state law, is banned from locally manufacturering the car unless the company forms a joint venture with a local automaker. One Tesla Motors Inc (NASDAQ:TSLA) executive in China said that even though the company is manufacturing cars in its giant Fremont facility, it is still looking forward to manufacturing cars in China.