Tesla Denies Rumors It Plans to Open Plant in Guangdong
Wu Ziye
/SOURCE : Yicai
Tesla Denies Rumors It Plans to Open Plant in Guangdong

(Yicai Global) April 11 -- American electric carmaker Tesla Motor Inc. [NASDAQ:TSLA] has denied rumors that it will set up a production facility in China's southern Guangdong province.

"Tesla has been committed to growing in the Chinese market, but the rumors that we will establish a plant in Guangdong are untrue," Tesla China said.

Media reports yesterday indicated that Tesla plans to set up a wholly-owned manufacturing base in Guangdong. They claimed that the site has been selected, that the automobile manufacturer is awaiting government approval, and that Tesla is set to announce its plan this year if all things go well.

Under Chinese government rules, foreign carmakers are not allowed to build wholly-owned auto manufacturing hubs in China and must form a joint venture (with foreign ownership capped at 50 percent) with a domestic firm to carry out production in the country, meaning Tesla would have to pick a Chinese partner to make cars in China.

The government would need to make an exception to give the go-ahead for the American auto group's rumored wholly-owned Guangdong plant.

Tesla attaches great importance to China, the world's largest market for new energy vehicles. Several municipalities and provinces have offered preferential conditions as they compete to become home to Tesla's new car plant in China, a Tesla director told Yicai Global earlier.

Despite persistent rumors, Tesla has not selected a site for its China plant yet. "We are still in the very preliminary stage," said Zhu Xiaotong, president of Tesla China. "Car-making is a very complicated process, so we must be prudent about site selection." The establishment of a production base will give rise to a huge industrial chain in neighboring areas, impacting its surrounding regions, Zhu said.

Tesla's factory in Fremont, California has an annual capacity of more than 100,000 vehicles.

 

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Keywords: Tesla , Electric Vehicles