(Yicai Global) Dec. 28 -- American carmaker Tesla has registered a leasing unit in Shanghai, the home of its first overseas factory, after the local free trade zone eased restrictions on financial leasing companies.
The California-based firm set up Tesla Financial Leasing China in Shanghai Free Trade Zone on Dec. 19 with USD30 million in registered capital, 21st Century Business Herald reported yesterday. Tesla's China head Zhu Xiaotong is chairman of the new unit, which plans to settle in the city's renowned financial hub, Lujiazui, where leasing units under SAIC General Motors and Ford Motor set up shop this year.
Shanghai FTZ brought in new measures earlier this month to encourage development of the financial leasing sector and facilitate the establishment of related companies. The rules allow firms with industrial backgrounds to set up leasing and other professional units in the zone, and will be optimized in future to suit market needs, the FTZ's administrative committee said.
Prior to the new measures, regulators had been looking to slow down progress of new leasing projects. In May, the Ministry of Commerce granted the China Banking and Insurance Regulatory Commission to supervise the sector and the Shanghai Financial Service Office the rights to approve new units, the report added, citing a source familiar with the matter. Rules for domestic-backed leasing firms have not yet been issued and their approval has phased out since June, he added.
Tesla announced plans in October to acquire nearly 1,300 acres of land for CNY970 million (USD141 million) to build its Shanghai Gigafactory, where it plans to start making cars in the second half of next year and conducting research and development for future projects. The facility is expected to produce 500,000 battery electric vehicles every year once it gets into full swing, likely two to three years after opening.
Tesla Hong Kong wholly owns the leasing unit, which will offer support in obtaining new-energy and related products in China. Founded in April 2010, the Hong Kong arm is mostly a sales division. It racked up HKD2.4 billion (USD307 million) in sales last year and had assets worth HKD4 billion at year-end.
Editor: James Boynton