Friday, June 23, 2017 | 1:03 p.m.
HONG KONG — Tesla Motors is in discussions to establish a factory in Shanghai, its first in China, a move that could bolster its efforts in one of its major markets even as it further lifts China’s position as a builder of electric cars.
In a statement Thursday, Tesla said it needed to set up more overseas factories to make cars that customers could afford. Such a strategy is a must in China, which charges steep tariffs for imported cars.
“Tesla is working with the Shanghai Municipal Government to explore the possibility of establishing a manufacturing facility in the region to serve the Chinese market,” a company spokesman said. “Tesla is deeply committed to the Chinese market, and we continue to evaluate potential manufacturing sites around the globe to serve the local markets.”
“While we expect most of our production to remain in the U.S., we do need to establish local factories to ensure affordability for the markets they serve,” the spokesman said.
China accounted for about 15 percent of Tesla’s revenue last year, nearly double the percentage it contributed in 2015.
Shanghai city officials did not respond to requests for comment. Bloomberg News reported earlier that Tesla and Shanghai had signed a preliminary agreement.
Tesla’s negotiations do not guarantee that a plant will be built. Under Chinese law, such a project would require Tesla to find a Chinese joint-venture partner. While China is full of Chevrolets, Fords and Volkswagens, most are made in factories jointly owned by a foreign automaker and a local company.
A Chinese Tesla factory could represent a big symbolic victory for Beijing. Spurred by incessant pollution and increasing dependence on foreign oil, China for the past several years has pushed to be a leader in electric car development.
That has raised concern in Western countries. In March, the European Union Chamber of Commerce in China complained that Chinese law requires manufacturers who set up shop in China to transfer crucial technology to their Chinese partners.
Still, it is not clear what arrangements Tesla would make in China. The battery is central to any electric car technology. Tesla has invested heavily in its $5 billion Nevada factory, called the Gigafactory, to produce batteries.
