Tesla Reaches Deal With Shanghai To Build A Car Factory In China

Posted: Oct 23 2017, 5:49am CDT | by , Updated: Oct 23 2017, 6:01am CDT, in News | Cars & Vehicles

Tesla Reaches Deal with Shanghai to Build a Car Factory in China
Credit: Getty Images
  • Tesla may Build First Car Factory in China

Tesla Strikes Deal With Shanghai to Build Factory in China

Tesla is looking forward to becoming the first car company from another provenance to build its factory in China. This step would gauge the degree of tolerance between the US and China on a diplomatic level.

Tesla does face the government of China which is autocratic and conservative in its outlook despite being a far cry from the communist regime of bygone times.

According to a report by WSJ, a joint venture is one alternative for Tesla. Also a free trade zone in which to build the factory is another option. This way many of the trade secrets would remain secrets.

According to an agreement with the Chinese government, Tesla would get ownership rights over its plant in the foreign land. Unless Tesla has its way, the cars manufactured at the plant could be subject to the high tariff rates that are applicable in China.

Yet it is hoped that Tesla will get to keep its trade secrets to itself. Negotiating with the Chinese government is not going to be an easy task. Better terms require a highly refined savvy.

Tesla will however buy many of its spare parts from China, especially if it builds its plant in the Shanghai region. China is a leader in the manufacturing of electric cars.

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