Tesla secures Shanghai site for $ 2 billion Gigafactory

BEIJING (Reuters) – Tesla Inc. has signed an agreement with the Shanghai government on a 860,000-square-meter plot intended for the construction of its first Gigafactory abroad, the automaker said Wednesday in an article published on Chinese social networks.

The land deal marks a milestone for the company and its managing director Elon Musk, who make cars locally in China for the fast-growing market, even as Beijing's tariffs on US-made products forced to raise the prices of its imported models.

In July, Tesla signed a much-awaited agreement with the Shanghai authorities to build its first plant outside the United States, which would double the size of its manufacturing site and lower the price of Tesla cars sold on the biggest car market in the world.

"Securing this site in Shanghai, the first Gigafactory outside of the United States, is an important step forward for our next advanced and sustainably-developed production site," said Robin Ren, vice president of Global Sales, in a statement. You're here.

Tesla did not give the price tag for the plot, but the Shanghai Bureau of Land Planning and Resources announced Wednesday that a plot of 864,885 square meters had been auctioned at a price of 973 million yuan (140.51 million dollars).

Tesla signed an agreement with the Shanghai authorities in July to open a plant of 500,000 cars a year in the Chinese city.

The plant will help tap China's fast-growing market for new energy vehicles (NEVs), a category that includes electric-battery cars and plug-in hybrid electric vehicles, while the wider car market is expanding. China is cooling down.

NEV sales rose 54.8% in September and 81.1% in the first nine months of the year, reaching 721,000 vehicles, last week announced the largest association in the automotive industry from the country.

Beijing, however, limits subsidies for the sector, concerned about overcapacity and "blind development", many people in the industry waiting for a relaxation of the process to overcome the wide range small local businesses of electric cars.

Tesla, which began recruiting for Shanghai's new plant in August, had previously announced that it would mobilize capital on Asian debt markets to fund construction, which would cost about $ 2 billion.