Tesla set to become first foreign automaker to operate a fully owned car plant in China

CHINA – American automotive and energy company Tesla Inc has received an approval from the Chinese government to set up a manufacturing plant and commence operations in the second largest economy in the world.

China’s industry ministry said in October this year that it had added Tesla to a government list of approved automotive manufacturers and had already granted the electric-vehicle maker a certificate it needs to start production in the country.

Speaking on the recent development, Yale Zhang, head of the Shanghai-based consultancy Automotive Foresight said that Tesla had now been given “the green light to start production in China.”

 Zhang further said that Tesla now had the free will to start production any time.

Tesla is currently building a US$2 billion factory in the eastern Chinese city of Shanghai. Once complete, the facility will be the automakers first car manufacturing site overseas.

Reuters reported in early October that Tesla was planning to start production at its China factory this month.

The current listing as an authorized manufacturer gives Tesla the much-needed authority approvals to start operations although it is still unclear when it will meet year-end production targets because of uncertainties around orders, labor and suppliers.

According to a report by Reuters, the American auto maker intends to produce at least 1,000 Model 3s a week from the Shanghai factory by the end of this year, as it tries to boost sales in the world’s biggest auto market and avoid higher import tariffs imposed on U.S. cars.

The factory which holds the title of being China’s first fully foreign-owned car plant, also reflects Beijing’s broader shift to open up its car market.

Shanghai authorities have offered Tesla assistance to speed up construction, and China announced in August this year that it had excluded Tesla models from a 10% car purchase tax.

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