Tesla registers new electric auto firm in Shanghai

Andrew Cummings
May 17, 2018

Just a few weeks after China announced foreign companies will no longer need to partner with local Chinese companies in order to manufacture cars in the country, Tesla created Tesla Shanghai Co.

Tesla Inc. has set up a new wholly owned company in Shanghai, moving a step closer to producing its electric vehicles in China and establishing its first gigafactory outside USA shores. Xiaotong Zhu, Tesla's China head, is listed as the company's legal representative of the company, which is a wholly-owned subsidiary of Tesla's Hong Kong company.

Tesla US has been in negotiations with the Chinese authorities for some time now to be given permission to set up its own factory in Shanghai, so that it can produce its electric vehicles locally.

Its business range includes technology development, import and export of electric cars and components, it said, adding Tesla Motors HK Limited is the sole shareholder of the Shanghai company with an operation period of 30 years.

Tesla is preparing to set foot on Chinese soil as the country begins lifting a cap on foreign ownership of domestic auto ventures.

Tesla now imports all the cars it sells in China from the United States.

Now, with China promising to loosen its hold on the auto market, the biggest gains will be seen by NEV ventures such as Tesla's. Amid pressure from the Trump Administration and lobbying from Tesla, CEO Elon Musk recently praised China for a "willingness to open their markets" and said he believed "they will do the right thing". This is a diametric shift for the country, as it has not allowed any foreign vehicle company to own more than 50% stake for more than 20 years. In addition, the company will also develop photovoltaic products.

Musk has previously said that future Gigafactory locations will manufacture both batteries and cars.

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