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Tesla in talks to build factory in Shanghai

Tesla Inc. on Sunday reaffirmed its efforts to build factories in China. The electric car maker based in Palo Alto said it has been in talks with the Shanghai municipal government to set up a car and battery factory in the region and expect approval of a plan by the end of this year.

Tinuku Tesla in talks to build factory in Shanghai

Tesla said again and has been in talks with the Shanghai municipality to build an electric car in the city. In January Tesla is rumored to be building a gigafactory in Shanghai, but so far they have refused to say in detail including the latest deal report.

Tesla wants to expand its presence in the growing electric vehicle market without sacrificing independence or intellectual property. China is the world's largest auto market and the country wages a 25 percent tax on imported vehicle sales and has not allowed foreign car manufacturers to build factories.

The Chinese government has considered allowing foreign carmakers to set up factories in the free trade zone to encourage more electric and hybrid vehicle production to meet the quota of eco-friendly vehicle sales.

Tesla said it had held talks with the Shanghai Municipal Government in June to explore the possibility of building a manufacturing facility in a free trade zone. Tencent Holdings Ltd owns a 5 percent stake in Tesla being a potential ally for its efforts to enter the Chinese market.

Tesla's CEO Elon Musk said the company will eventually need a vehicle and battery manufacturing center in Europe and Asia to accelerate production which this month has experienced a production bottleneck that lacks 1,500 units from the previous plan.

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