China May Relax Rules on Foreign Auto Makers, Helping Tesla

Published on: 25 Sep, 2017

China is considering relaxing rules requiring foreign auto makers to have a local partner, according to a report by the Wall Street Journal. The change in rules will be considered a major victory for Tesla Inc (NASDAQ: TSLA), which will be able manufacture their electric vehicles in China independently. Foreign companies would be subject to a 25% import tariff.

Tesla has been working to expand their business operations in China. This will likely prove to be beneficial, as the country is looking to promote electric vehicles sales., as a part of their environmental policy.

"Tesla is working with the Shanghai Municipal Government to explore the possibility of establishing a manufacturing facility in the region to serve the Chinese market. As we’ve said before, we expect to more clearly define our plans for production in China by the end of the year,” A Tesla spokesperson referred Business Insider to a June statement.

According to the statement, Tesla expects most of its production to remain in the US, but is looking to establish factories in China to keep its vehicle prices affordable.

“The EV industry in China is studying Tesla and taking inspiration from it,” said Fu Yuwu, president of the government-backed Society of Automotive Engineers of China. “It inspired a batch of Chinese startups who studied Tesla before they started their own business.”


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Danny Abramov



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