Back in June, Tesla confirmed that it was in discussions with the Shanghai municipal government about the prospect of opening a local manufacturing facility to serve the Chinese market.
A Wall Street Journal report citing unnamed sources privy to the negotiations claimed on Sunday that a deal has come to fruition, “[allowing] the Silicon Valley auto maker to build a wholly owned factory in the city’s free-trade zone.”
Tesla declined comment and instead reiterated that an announcement is forthcoming later this year, according to Electrek. Several previous reports of the company reaching an agreement to set up shop in China have proven to be mere speculation.
But if the details of the WSJ report are borne out, Tesla will become the first foreign automaker to open a factory in China without a joint-venture with a domestic company.
While Tesla would reportedly not be able to skirt the 25% tariff China imposes on foreign auto imports by manufacturing cars in Shanghai, the deal would likely still be a boon for the company’s bottomline by lowering production costs.
Tesla’s share of the Chinese electric car market is already approaching 10%, by far the largest of any foreign automaker, and in 2016 its total China sales surpassed $1 billion.
In September, Electrek reported that a new Tesla Supercharger station, slated to become the biggest in the world once completed, is under construction in the basement of Pudong’s Lilacs International Commercial Center.
The Chinese electric car market is already the world’s largest, with sales this year estimated to eclipse the rest of the world combined.
[Images via Reuters / TechNews]