Tesla would become the first automaker company to have its own manufacturing plant in China, Tesla has already started working on electric car factory in Shanghai, China. This deal of Tesla with Chinese Govt. would make a huge difference in industrial relations between China and automakers. It is because there were limited options for the production units in china, either you could set a joint venture, i.e. you could share technology & profit with Chinese partner, or the other way round was to set manufacturing in free-trade zone in china, but then you had to give huge tariffs.
Automaker usually go for the joint venture, but Tesla is hitting his ideas in a different way, and for the beginning it is dealing with Shanghai municipal govt. to get facility over there. Tesla is good in negotiating for its deals, as it is the fastest growing electric car company in the world, facilitating pollution free vehicles to the people, of course in affordable prices. So, Tesla would start its manufacturing unit in free-trade zone in Shanghai; and what does this mean to the company, selling of the cars in china would be treated as they are shipped outside from the country, even they would be manufactured there.
What benefit does electric car company have by working in free-trade zone?
The company can keep its technology as secret from other, and along with this if every thing goes well then it can hope to have some better deals with Chinese Govt. in future.
But production unit in China itself will help the company to supply more electric cars to other locations than shanghai, this would help Chinese people as well, as the govt. has already started plans to avoid gasoline vehicles in the country. Chinese govt. has already started plans to ban internal combustion cars in the country.
‘The profitable part for Tesla would the largest market of China for electric cars, because china is or will be the largest consumer & manufacturer of Safe electric cars.’
