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Tesla talking with China about making cars there

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Tesla is in discussions with Shanghai as the electric-car maker explores building a manufacturing facility in China, the company said Thursday.

Does this mean your Tesla will someday be made in China? If you live in the United States, no.

The Palo Alto company expects most of its production to stay in the United States, a spokesman said in an emailed statement to SiliconBeat. However, “we do need to establish local factories to ensure affordability for the markets they serve,” he said.

In China, Teslas are subject to a 25 percent import tariff, plus a 17 percent value-added tax. A Model S starts at $103,000 in China compared to a starting price of $68,000 in the United States, according to a recent Barron’s article that also said Tesla sold more than $1 billion worth of cars in China last year.

Tesla said it will have more information about its production plans in China — which by its sheer size is obviously an important market for the company; the country reportedly made up 41 percent of global EV sales in 2016 — by the end of the year.

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Earlier this month, CEO Elon Musk said during the company’s shareholder meeting that its lone factory, in Fremont, is “bursting at the seams.” He also said he was giving “serious consideration” to three new factories and envisioned having 10 to 20 plants worldwide eventually.

The news about possible manufacturing in China, which would probably also mean a reduction in production costs, comes as Tesla prepares to make more cars than it ever has. It expects to begin mass production of its new Model 3 sedan, its cheapest car yet at $35,000, next month.

Photo: A car handover ceremony in Shanghai as Tesla delivers Model S cars to their first buyers in China on April 23, 2014. (AFP/Getty Images)

Tags: China, electric vehicles, EV, Manufacturing, tesla

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