Elon Musk, speaking at Tsinghua University in Beijing, said that Tesla is in discussions with government officials in China about producing its vehicles locally, and hopes to make a specific announcement soon.
Some media reported that Musk spoke of building the upcoming Model 3 in a Chinese factory within 2 years, but he later tweeted that his remarks weren’t transcribed correctly. “Model 3 is due in ~2 yrs. A China factory for local demand could be as soon as a year after,” Musk clarified.
Tesla is betting big on China’s growing demand for EVs, but sales there have been mediocre so far. The company said last week that it sold 3,025 Model S in the country from January to September.
Musk said local production could cut the sales price of Teslas in China by a third.
Chinese governments at all levels offer an array of incentives for EV buyers, but many are not available for imported vehicles. China also imposes significant import duties on automobiles, which is why the major global OEMs have been producing cars in China for the past decade.
Foreign automakers are generally required to establish a joint venture with a Chinese company to produce cars in the country. Musk said Tesla is already working with Chinese Internet company Baidu on GPS navigation and automation.
Tesla has asked the Obama administration to pressure China to make it easier for US automakers to do business there, and has pledged to modify its vehicles to meet Chinese charging standards.