Tesla could setup its own EV factory in China as early as this year

Tesla could setup its own EV factory in China as early as this year

US-based electric vehicle manufacturer Tesla may now have its own electric vehicle factory in China, because the restrictions on overseas automakers’ ownership of local car factory will be officially phased out by the Chinese government in near future. With high possibility of trade war between China and the United States, automobile companies with production base in China won’t be impacted.

The move by the Chinese government to lift ownership restrictions on foreign automakers comes one week after an announcement by Chinese President Xi Jinping that his administration has reversed its position with regard to the steep tariff for overseas automakers in the country.

In a confirmation of the move, the National Development and Reform Commission has reportedly told AP that “all ownership restrictions will be lifted” over a transition period of five years. The Commission also specified that ownership restriction for electric vehicle (EV) manufacturers will be the first of the restrictions to be lifted by the Chinese government.

The lifting of ownership restrictions for EV manufacturers at least is not a big issue for China, since most of the other foreign automakers in the country are already in compliance with the ownership restriction because of the urgency created by the ZEV mandate.

According to the information shared by the National Development and Reform Commission, the ownership restriction on EV manufacturers could be lifted in China as early as current year. Hence, it is possible that the change may enable Tesla to own 100% stake in EV factory in China in 2018 itself.