Tesla has been exploring various locations for a future factory, but it appears to have settled on China for the latest facility. Elon Musk and co have signed a deal with the authorities involving the the brand new factory, that will be built in Shanghai.
This is a premiere locally, because foreign car makers don’t get such permissions usually. However, in recent years the Chinese government has been betting big on eco-friendly technologies and electric cars, as well as self driving tech. Things are also known for moving faster in China, especially the building of famous enterprises. A Tesla factory means that the company will have a footing in Asia, plus expand in the region.
From what I’ve heard the import tax still won’t be cut, so their cars will be taxed extra locally, compared to the Chinese cars. The factory mean that production costs may be cut for Teslas sold in China. Elon Musk and co have been pursuing a deal with Chinese authorities for a while now, as the presence of the company grew in this country. Tesla sold $1 billion worth of cars in China last year and it accepted a big investment from Tencent Holdings, a tech giant from the nation.
Up untill now Teslas sold for about 50% more in price in China than USA, because of the import duties. Setting up shop in the Shanghai free trade area will reduce both labor and transportation costs. Musk expects the prices to be cut by a third.