US luxury car maker Tesla confirmed Thursday that it plans to open its first factory in China, specifically in Shanghai, to supply the growing Chinese market with “affordable” prices.
In a statement, the Silicon Valley-based company confirmed that it is exploring with Shanghai authorities the possibility of opening a factory that would build electric cars for the Chinese market, a large consumer of luxury vehicles.
“Tesla is deeply committed to the Chinese market, and we evaluate possible manufacturing sites around the world to serve local markets,” the company said in a statement quoted by several US media.
“While we expect most of our products to remain in the United States, we need to establish local factories to ensure they are affordable for the markets they serve,” the statement added.
The company did not confirm that it has signed a preliminary agreement with the Shanghai Municipality to produce vehicles there, as recently reported by the Bloomberg agency.
China, which last year produced 15% of Tesla’s revenue, wants to boost the use of electric vehicles, which opens up a very interesting market for the company of Elon Musk.
Under Chinese law, Tesla would have to form a joint venture with a local company to be able to manufacture in Shanghai and, according to Bloomberg, negotiations with the Chinese city would help the US entity to circumvent a 25% customs tax on its vehicles , Which would favor him to compete in China. Efe