Tesla Motors is preparing to manufacture electric cars in China in the next three to four years, according to a report in Bloomberg quoting company’s CEO Elon Musk.
Additionally, Tesla is building a big network of battery-charging stations in China, including superchargers in Beijing and Shanghai, Musk said.
“At some point in the next three or four years we’ll be establishing local manufacturing in China,” Musk said. “China is very important to the future of Tesla. We’re going to make a big investment in China in terms of charging infrastructure.”
Currently Tesla is preparing to deliver Model S electric vehicle in China.
By establishing a local manufacturing unit, Tesla will be able to avoid China’s 25 percent import tariff, making the vehicles cheaper than the current price.
China is a huge market for cars; yet the country has not progressed in terms of electric vehicle (EV) adoption. Analysts believe the country has failed in building robust EV charging infrastructure to meet the needs. Another challenge is the decision by Chinese car makers and utilities to develop different charging standards.
The Model S, when equipped with an 85 kilowatt-hour battery, will be priced from 734,000 yuan ($118,000) in China — compared with about $71,000 in the U.S. before federal tax credits — as shipping charges, value-added taxes and import duties increase the price tag, Bloomberg said.
If Tesla qualifies for China’s electric-car subsidies, it can offset extra costs associated with selling in the country.