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Reuters ) – Elon Musk, the CEO of Tesla, concluded Tuesday an agreement with the Chinese authorities for the construction of a new car factory in Shanghai, its first factory outside the United States. The deal was announced as Tesla increased the prices of its Chinese-made vehicles to offset the cost of new Chinese government-imposed tariffs in retaliation for US President Donald Trump's heavier duties on the Chinese. Musk was in Shanghai on Tuesday, and the Shanghai government said in a statement that he welcomed Tesla 's decision to invest not only in a new factory in the city, a center of the city. Chinese automobile industry, but also in research and development. good. China has long sought to capture more talent and capital invested by global automakers in advanced electric vehicle technology.
Tesla plans to produce the first cars about two years after the start of construction of its Shanghai plant. According to the company, the Tesla factory in Shanghai would be large by the standards of the automotive industry, where most factories are equipped to build 200,000 to 300,000 vehicles a year, this which is roughly equivalent to the expected annual production. Tesla's factory production in Fremont, Calif.
Tesla rose 1.5 percent in US trade while some analysts were wondering where the losing business would receive the capital needed to build and host such a large factory. said Tesla will be positive cash flow this year. Analysts predicted that it would raise capital to fund a list of new projects, including the launch of an electric semitrailer, a van, a compact SUV and new battery and vehicle production facilities. that Musk has proposed for China and Europe. I'm sure Tesla needs fresh money no later than next year, "said Frank Schwope, a NORD / LB analyst.
The Shanghai government has suggested that it could help with some of the capital costs. "The Shanghai Municipal Government will fully support the construction of Tesla's plant," says Tesla's press release
Tesla said that the announcement of Tuesday would have no impact on US manufacturing activities, which continue to grow
China is the largest market for electric vehicles and most forecasters expect an acceleration of electric vehicle sales in the country, while government regulation is aiming for a goal of 100% electric vehicles by 2030.
More than 28 million vehicles sold In China, last year, annual sales are expected to exceed the 35 million by 2025. This would be more than double the current US market, where sales of new light-duty vehicles reach about 17 million vehicles a year.
Musk was talking about building a Chinese factory long before the Trump administration was offering punitive tariffs on Chinese products. Until recently, China imposed 25% tariffs on imported cars and, for decades, car manufacturers have been building more vehicles in the markets where they were sold to offset currency changes and rollovers. commercial policy. to advance land while President Trump is fighting to stop US manufacturers from responding to his trade policy by shifting overseas production, as Harley-Davidson, the US motorcycle maker, said last
. China is using its power to attract investment from the global auto industry. German automakers dominated Monday and Tuesday a series of agreements between China and Germany on the development of electric vehicles and technologies for connectivity and autonomous cars.
BMW Brilliance Automotive and BMW Brilliance Automotive to 520,000 BMW brand vehicles in 2019.
The capacity of the two BMW Brilliance Automotive production sites will overtake for the first time the US BMW plant in Spartanburg, in South Carolina. BMW said last week that it would be unable to fully absorb a new 25% Chinese tariff on imported models manufactured in the United States and is expected to increase the prices of vehicles that it manufactures in Spartanburg .
Volkswagen, meanwhile, said it would cooperate The Chinese group FAW on technologies including e-mobility, connectivity and autonomous cars.
Tesla has engaged in protracted negotiations to open its own factory in China to strengthen its position in the growing market Tesla has raised prices in China over the weekend to a level 70% higher than that of the states United States, because of trade friction between Washington and Beijing that saw several US imports, including cars, subject to retaliatory tariffs. 25%
Musk had previously criticized China 's strict automobile rules for foreign companies, which would have forced him to give up a 50% stake in the factory. After China announced in May that it planned to abolish by 2022 the rules on the foreign ownership restriction of new energy vehicle companies, Tesla registered a new electric car business in Shanghai
. allow it to produce locally and avoid import duties. The easing of the 50/50 rule for joint ventures in China only benefits Tesla because they do not have an existing joint venture in China "as do rivals, said Tasha Keeney, an analyst. at ARK Invest.
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