The signing was held at Shanghai’s Fairmont Peace Hotel but media attendance was limited, a Shanghai government official who declined to give his name told Reuters.Tesla boss Elon Musk had previously criticized China’s tough auto rules for foreign businesses, which would have required it to cede a 50 China Drop-in Bathtubs per cent share in the factory.Tesla’s Chief Executive Elon Musk attended the signing, according to a Reuters witness..Tesla has been in protracted negotiations to open its own factory in China to help bolster its position in the country’s fast-growing market for electric cars and to avoid high import tariffs.Tesla hiked prices in China over the weekend to a level more than 70 percent higher than in the United States amid mounting trade frictions between Washington and Beijing that have seen several US imports, including cars, become subjected to retaliatory tariffs of 25 per cent.Chinese financial magazine Caijing, citing sources close to the project, said the plant’s exact location had not been decided and construction would start early next year.Tesla on Tuesday signed agreements with Shanghai authorities that will allow it to open a plant in the Chinese city with an annual capacity of 500,000 cars, local media reported.Tesla and Shanghai authorities did not immediately respond to requests for comment.
Under the agreements, Tesla will independently open a plant integrating research and development, manufacturing and sales functions, according to news website Knews, which is affiliated to state-owned Shanghai Media Group.The agreements signed on Tuesday also include a memorandum of understanding between Tesla and the Shanghai municipal government, under which Shanghai agreed to support Tesla to set up a research and development innovation center. The company was keen to maintain control of its own plant and protect its technology. Bloomberg reported on Monday that Musk will visit Beijing on Wednesday and Thursday.But it registered a new electric car firm in Shanghai in May after China announced that it planned to scrap rules on capping foreign ownership of new-energy vehicle (NEV) ventures by 2022.The plant will be based in the Lingang area, close to Shanghai’s Yangshan port, and will count as the largest foreign manufacturing project in the Chinese financial center’s history, Knews said.
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