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Is Tesla Planning to Build an Electric Vehicle Manufacturing Plant in China?

Electric Vehicle Manufacturing Plant in China

Tesla Inc. is planning to set up a fully owned production factory for electric vehicles in Shanghai, China.

China: Tesla Inc., a US based automaker, is evaluating feasibility aspects of constructing an electric vehicle manufacturing plant in the free trade zone of Shanghai, China. The company is in dialog with the government authorities of Shanghai city to reach a final agreement.

The deal would allow the company to cut down the manufacturing and shipping expenditure for vehicles sold in China, however Tesla would not be excluded from 25% import duty imposed by the local government.

Tesla possess a network of more than 700 charging stations across 170 cities of the country and is aiming to bolster its reach in China energy vehicle sector with this deal. The agreement is expected to reach closure by the end of 2017.

TechSci Research depicts that the approval of Chinese government to Tesla’s plan would open new industrial route of business expansion for international carmakers by tying with the state-owned enterprises. The strategic deal would result in strengthening the company’s leadership in the world’s largest automotive market and the factory would also be able to serve the incoming demand from potential customers in other growing Asian nations as well.

Furthermore, the production of affordable range of EVs due to availability of cheap & skilled labor and reduced logistics & transportation costs would upsurge the demand for electric vehicles across Asia-Pacific, thereby consolidating the company’s position in the global electric vehicles market.

According to the recently published report by TechSci Research, “Global Electric Vehicle Infrastructure Market By Type, By Installed Location, By Region, Competition Forecast and Opportunities, 2011 - 2021, the global market for electric vehicle infrastructure is forecast to grow at a CAGR of over 27% during 2016-2021, on account of favorable government policies that promote adoption of electric vehicles and growing concerns over harmful effects of air pollution.

Additionally, grid integration of electric vehicles is projected to offer huge impetus to global electric vehicle infrastructure market in the coming years. Evolution of smart grid technologies and the concept of virtual power plants is forecast to further boost the global market for electric vehicles and its related charging infrastructure in the coming years.

The option of power trading for electric vehicles owners is also expected positively influence the global electric vehicle infrastructure market during the forecast period.

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