Tesla has become of the most prestigious car manufacturers in recent times, and this has much to do with the company selling quality electric vehicles at an affordable cost. It also has a lot to do with the autonomous technology found in its cars.
Now, Tesla isn’t a company with power in the United States and Europe. In the Asian territories, the company is well known, especially in china. We understand that sales in China have managed to generate substantial revenue for Tesla, and this is one of the reasoning behind the latest move.
The plan for a Chinese manufacturing plant
China is a big market for Tesla, henceforth; it makes perfect sense for the company to move some of its manufacturing there. By doing this, Tesla can cut costs for many of its loyal customers, and ultimately, gaining new ones as well.
With plans to enter the Chinese manufacturing market, some folks might believe Tesla is aiming to create most of its vehicles outside of its home country, but such is not the case. The company says it expects to have most if its production done in the United States for the foreseeable future.
China at the moment wants to cut down on its emissions, and the best way to do this is by having energy saving vehicles as the primary public transportation.
Back in 2016, over 507,000 energy saving cars were sold in China alone, and this number includes electric vehicles. If growth continues down this line, then one should expect the country to surpass the United States in the years to come.
After all, China is already dubbed as the future’s most powerful economy in the world, and this will come at no easy feat.
Tesla’s profit in China
Last year, the electric car giant made $7 billion in profit, with 15 percent of that number coming from China. This is big news for China because it now has the complete attention of the most significant electric carmaker in the world.
Not to mention, this should spur homegrown carmaker to act in the face of new competition.
For now, Tesla has signed a preliminary deal with the city of Shanghai to create electric vehicles there. Doing this allows Tesla to set up shop in Shanghai’s Lingang development zone. Furthermore, the rules suggest the company sign an agreement with one or more Chinese companies for the sake of gaining the right manufacturing permit.
As it stands right now, China has the technology to create Electric Cars in China, henceforth, the move to boost production there is an excellent idea. Now, time will if Tesla plans on keeping its manufacturing plant in the United States, or if it aims to move everything to the Chinese market.
