June 28, 2016

Tesla motors rumored to have a $9 billion joint venture for a new factory in China

Tesla Motors has agreed to a non-binding agreement with the Chinese state-owned company Jinqiao Group to jointly build a $9 billion factory. It is believed that Tesla will give the rights to Jinqiao Group to construct a production plant in the Chinese city of Shanghai.

Six months ago Tesla chief Elon Musk publicized his intention to pick a production facility based in China in the middle of 2016.

Tesla and Jinqiao Group will each invest $4.5 billion on the project. If the rumors are true, the Tesla Motors-Jinqiao Group deal will be significantly bigger than the Walt Disney Shanghai Resort project with cost $5.5 billion.

Many industry experts believe that Tesla's decision to locate its production in China is to avoid the 25 percent import tax on electric cars shipped to China.

The latest deal was not announced to the public, so no estimated timeline regarding when the project will start was released. On the other hand, two other Chinese cities are also attempting to persuade Tesla Motors to locate its assembly plant in their respective cities. The two cities are Suzhou and Hefei.




SOURCE - China Topix


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