Telsa has confirmed its plans to build a manufacturing plant for its electric vehicles in Shanghai, so as to better serve the Chinese automotive market.
As The Wall Street Journal notes, the move will help the Elon Musk-fronted company cut production costs and won’t need to form a joint venture firm with a local business – but it’ll likely still have to cough up a 25 percent import tariff on the cars it produces and sells there.
Regardless, that’s a huge win for Tesla, as China is poised to put seven million electric vehicles a year on the road by 2025. The company’s sales in that country alone accounted for about 15 percent of its annual revenue last year at about $1 billion.
Beyond reducing manufacturing costs, the additional plant could help Tesla meet burgeoning demand for its $35,000 Model 3 sedan, which it unveiled last April and began producing in Fremont, California, this July. Plus, China seems to be bullish about autonomous vehicle tech, with major firmslikeBaidu throwing their hats in the ring. That’s right up Tesla’s alley, so it’ll be interesting to see if treading new waters in the country helps boost the company’s self-driving efforts in the coming years.