Tesla Registers Shanghai Electric Car Firm in China
SHANGHAI — As China readies to end limits on foreign factory ownership, Tesla is looking to expand its footprint into the world's biggest market for electric vehicles. The California-based electric automaker registered a new company, Tesla (Shanghai) Co Ltd, on May 10, according to a filing with the National Enterprise Credit Information Publicity System seen by Reuters. The filing said the company would be capitalized at RMB 100 million ($15.8 million).
The new company will focus on electric cars, spare parts and batteries.
Tesla has been in protracted negotiations to set up its own plant in Shanghai to produce vehicles locally, gaining access to China's rapidly growing market for electric vehicles while avoiding high import tariffs.
It was not clear if the new firm was related to the anticipated Shanghai plant. "We don't have anything new to add on this registration for now," a Tesla spokeswoman told Reuters on Monday.
The new company was registered in south-east Shanghai within the city's free-trade zone area lists Tesla China head Zhu Xiaotong as its legal representative, and Tesla Motors HK Limited as the sole shareholder in the firm.
Tesla currently imports all the electric vehicles it sells in China from the United States. It has other wholly-owned firms registered in China focused on sales and research and development.
China has said it will scrap limits on foreign ownership of new energy vehicle (NEV) ventures this year and all automotive ventures by 2022. Current rules capped foreign ownership at 50%, requiring Tesla to enter into a 50/50 joint venture with a Chinese partner—something Tesla CEO Elon Musk was unwilling to do as it looks to tap into the world's largest EV market.
The Chinese government uses the term NEV to designate plug-in electric vehicles eligible for public subsidies, and includes battery electric vehicles (BEVs) and plug-in hybrid electric vehicles only.
Analysts have said the main beneficiaries of looser ownership rules would be NEV makers like Tesla to protect its technology rather than cede a 50 percent share.
Musk has been critical of China's tough rules for foreign businesses, saying they created an uneven playing field. However, earlier this month he said the firm could soon unveil the location of a Chinese gigafactory.
China is an important marker for Tesla, as well as for General Motors. Plug-in-hybrid vehicle sales are booming in the country. China sold 777,000 new-energy vehicles in 2017, a 53 percent increase over 2016.
Last year, China rolled out a plan to eliminate internal combustion engines in cars by 2040.
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