Tesla Shanghai Co. Ltd was established, according to a filling disclosed by China’s official business database on Monday, with Tesla’s Hong Kong division identified as the sole owner. According to WSJ, Tesla Inc. had been in talks with the Shanghai government over the possibility of a Shanghai factory since June.
Last month, President Xi Jinping pledged greater protections for intellectual property and lower tariffs and reduced ownership restrictions for foreign car makers, changes to previous policies that had tripped up Tesla’s previous efforts to expand to China.
Previous policies subjected Tesla vehicles to 25% import tax, resulting in the price of a Tesla to be way above the range of China’s most popular electric vehicles that sell between 130,000 yuan (approximately US$20,480) and 448,000 yuan (approximately US$70,580). Consequently, Tesla’s sales ranked 10th, with a total of 14,883 units delivered in 2017. However, this may all change with the construction of Tesla’s new fully-owned factory.