As China wants to explore its auto market fully to the foreign enterprise, Tesla finds it worth and plans for its first non-US Gigafactory. To explore its auto market, China lifted cap on foreign ownership of domestic auto enterprise. Tesla finds Chinese auto market worth and plans to set foot on it by planning its first non-US Gigafactory. Also, China is the world’s biggest market for electric cars. So, it was certain for a company like Tesla to set up a firm in China where the real money is in the market of electric cars. According to a filling with the National Enterprise Credit Information, Tesla registered a new electric car firm in Shanghai of China last week.
Tesla (Shanghai) Co Ltd
This new electric firm registered by Tesla will be called as Tesla (Shanghai) Co Ltd. It is registered with a capital of 100 million yuan ($15.8 million). It will focus on electric cars, batteries, spare parts, and the development of photovoltaic products as well. Earlier, there were reports about Tesla to unveil the location of its new Chinese “Gigafactory” in the next quarter of the year. Also, Tesla’s Chief Elon Musk thanked Beijing for lifting caps on the foreign ownership of local electric car firms. Tesla (Shanghai) Co Ltd is registered in Shanghai’s free trade zone area. Zhu Xiaotong will represent the company as legal representative along with being the only shareholder of Tesla Motors HK Limited. It was very rare for a company to have a fully owned subsidiary in China. But, after April, China announced that it would relax limits for foreign car manufacturers to get into the business with local partners to explore the market of electric cars in China. This announcement was benefiting Tesla as other manufacturers already exist in China with local partners. So, it was a huge opportunity for Tesla to get into the electric car market of China and Tesla made it.
China Electric Car Sales (March 2018)
Sales figures here are not 100% official.
Tesla would be certainly benefited by operating independently in China. Also, Tesla could keep all the profits it earns from the sales. It would be a challenge for the company to establish its local supply chain in a huge market of China. In the coming months, the company will speak more on this. Tesla spokeswoman also told CNET through an email that in the coming months, Tesla wishes to let people discover more about the company.