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INTERNATIONAL – Tesla Inc. is planning a plant in China with a capacity of 500,000 vehicles a year, its largest step beyond the United States to date, according to people close to the record.
Tesla must sign a memorandum of understanding with local entities in Shanghai, people said, asking not to be identified that the information is not public. Bloomberg reported earlier that CEO Elon Musk would be in town for an event with the government on Tuesday. A representative of Tesla in China did not immediately respond to a request for comment
While Tesla has been working on setting up production in China for over a year, President Donald Trump is trying to support manufacturing in the United States. Harley-Davidson Inc. is expanding outside the United States, highlighting the urgency with which companies are moving to avoid the damage caused by escalating trade disputes.
The automaker's shares increased their lead in the market before the markets. ] The youngest US automaker is looking to expand capacity and reach global markets more effectively. Tesla's only car badembly plant is in Fremont, California, with a giant battery plant in neighboring Nevada. After gaining ground in China, the world's largest market for electric vehicles, Tesla announced that it was planning to build a plant in Europe by the end of 2018.
Tesla said a year ago that it was "hard to believe". he was working with the Shanghai government to explore local manufacturing. Since then, production in China has become even more compelling: last week, in response to tariffs imposed by the United States, China increased import duties on cars manufactured in the United States to 40% . A factory in China also reduces shipping costs and potentially makes supply components more economical.
Tesla can win in China, according to Beijing terms: Anjani Trivedi
The company boosted the Model S sedans and X crossovers in China Beijing has imposed additional rights on cars built in the United States, putting its vehicles out of reach of more consumers in its No. 2 market.
In November, Musk said that Tesla is about three years away from producing the world's largest auto market. The factory will manufacture a few hundred thousand vehicles a year for buyers in China and potentially in other parts of Asia, he said at the time. Tesla will probably manufacture the smallest Model 3 sedan and the next Model Y crossover in China, he said, rather than the Model S sedan or Model X sport utility vehicles, which often sell for more than $ 100,000 in the United States. United.
a mbadive growth opportunity for Tesla and its competitors such as BMW AG and Daimler AG, who are looking to take advantage of the growing market. Sales of new energy vehicles – a category that includes battery-powered automobiles, plug-in hybrids and fuel cells – reached 777,000 units last year and could exceed 1 million this year, according to estimates by the company. 39, China Association of Automobile Manufacturers. The government's target is 7 million vehicles a year by 2025.
Tesla sold 14,779 vehicles in China last year, according to LMC Automotive data. This gave it about 3 percent of the country's battery-powered electric vehicle market, placing it as the # 10 brand in this segment. China accounted for 17% of Tesla's business figure in 2017, according to a filing with US regulators.
Accelerating manufacturing is essential for the automaker to support itself while pursuing Musk's mission. Tesla produced 5,031 Model 3 in the last week of the second quarter at its Fremont plant, reaching a target that, according to Musk, was crucial for generating money and making profits.
– BLOOMBERG
