Tesla appears determined to grab a bigger share of the lucrative Chinese electric car market. According to a recent report, the U.S firm is looking to build a factory in China to make its cars more attractive for local buyers. Previously, it was revealed by CEO Elon Musk that he was planning to open a factory in Mainland China.
Setting up a facility in China isn’t easy
Earlier this month, a Tesla representatives allegedly traveled to Suzhou (a large Chinese city located roughly 60 miles from Shanghai) to discuss the possibility of opening an assembly plant on the outskirts of town with members of the local government. No details have been made public yet, and when the Global Times contacted a Tesla spokesperson, he refused to comment on the matter.
It is not easy for foreign car makers to set up shop in the Chinese market. Automakers need to find a local manufacturer to form a joint venture with after sourcing a suitable plot of land. As of now, it is too early to tell what Tesla has in mind and whether talks have already started or not. Nearly all of China’s largest automakers already operate at least one joint venture with a major European, Japanese, or American company. If the news of Tesla planning a factory in China is true, then the automaker will possibly reveal more details about it in the coming months.
How it could help Tesla
It is understandable that manufacturing cars in Suzhou could boost the automaker’s market in China tremendously. The electric car maker can increase its influence in the country by making its all-electric models, mainly the much-awaited Model 3, more affordable in the region.
Also by opening a factory in China, the U.S. firm would be able to bypass the high tariffs Chinese authorities slap on imported cars. But it seems like the cars built in Tesla’s upcoming Chinese factory will be sold only on the local market for the time-being.
When or if we will actually see a Tesla factory in the country completely depends on when construction starts and how long it will take for the plant to become fully operational. Meanwhile, Tesla is set to unveil the much-anticipated Model 3 tomorrow. Production on it is scheduled to kick off in 2017 in the United States.
