Tesla buys land for first Chinese factory

Cornelia Mascio
Ottobre 19, 2018

The real estate transaction marks the first step for Tesla and its Chief Executive Elon Musk to build cars locally in China for the fast-growing market, even as tariffs imposed by Beijing on US -made goods have caused Tesla to hike prices of its imported models.

That is "an important milestone for what will be our next advanced, sustainably developed manufacturing site,"Vice President of Worldwide Sales Robin Ren said in a statement".

Tesla signed an agreement with Shanghai municipal government in July to build a factory with a planned annual capacity of 500,000 electric cars. But China is the No. 2 market for Tesla after the US, so it remains a priority market.

Tesla Inc (NASDAQ:TSLA) previously announced plans for a factory in China have taken a major leap forward.

As Reuters reports, the Shanghai government sold Tesla a plot of land that's roughly 860,000 square meters (213 acres) in size.

Though it ran into a bit of a roadblock earlier this year due to US-China trade war tariffs, the company has been selling its vehicles in the country for some time, with quite a bit of success.

The announcement was made on Wednesday, when Tesla executives, leaders of the Shanghai Economics and Information Committee, Shanghai Lingang Area Development Administration and the Shanghai Lingang Group, all came together for an agreement signing ceremony.

Tesla's estimated sales in China of under 15,000 vehicles in 2017 gave it a market share of less than 3%.

With this, the company will also receive access to cash incentives that are only available to locally produced electric vehicles, a category Tesla will fall in once its Gigafactory 3 is up and running. For the first nine months of this year, new-energy vehicle sales across mainland China jumped by 81.1 per cent from a year ago to 721,000 units. Meanwhile, the facility is expected to produce 500,000 electric vehicles a year at full capacity.

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