Tesla has made it clear it plans to produce its electric cars in China in the near future. According to people close to the dealings, the automaker is close to purchasing the land for a new factory.
Bloomberg reported Wednesday that Tesla is the only bidder on a plot land in Shanghai for what could be home to its first Chinese factory. The land reportedly costs $145 million, and the local government could allocate the land to Tesla as soon as this month. The carmaker currently pays tariffs of up to 40 percent on every car it imports to China from the United States. A local factory would save forego the tariffs and open up its business to the world’s largest market for electric cars.
The Chinese government’s announcement that it will no longer require joint ventures to do business in the country also gives Tesla the opportunity. Previously, Tesla would have needed to partner with a local company to produce vehicles. However, the new regulations leave Tesla to own its entire Chinese operations.
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However, the report claimed Tesla wants to raise some of the $5 billion needed to build the factory with local partners. If and when the factory does come online, Musk said the plant could produce 250,000 cars annually. Further, it would be in addition to the current output of the Californian plant.
Despite rosy words and promises, Tesla has yet to turn a profit after beginning production of the Model 3 electric car. Where it will secure the funds to invest in the Chinese site is unclear.
[Source: Bloomberg]
A version of this story originally appeared on Hybrid Cars.
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