Tesla just registered a new electric vehicle firm in China

Tesla just registered a new electric vehicle firm in China

As per Electrek, the scope of the new company's business includes the basic wholesale, import-export, and electric vehicle display, but also is registered for technology development and transfer.

"We don't have anything new to add on this news for now", a Tesla spokeswoman told CNET in an emailed statement, adding the company hopes to share more "in the coming months".

AFP reported that Tesla has set up a company in Shanghai focusing on technology development in China, a crucial market for the USA firm as the country plans to scrap ownership limits for foreign automakers.

Tesla US has been in negotiations with the Chinese authorities for some time now to be given permission to set up its own factory in Shanghai, so that it can produce its electric vehicles locally. Tesla's head of China, Zhu Xiaotong will be the new company's legal representative and Tesla's Hong Kong branch, Tesla Motors HK Ltd.as the only shareholder.

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Tesla has set up a subsidiary in Shanghai that will focus on R&D related to electric cars, a clear indication that its plans to build a plant in China have been revived. During the company's most recent earnings call Musk suggested a formal Chinese factory announcement could come as soon as the third quarter of this year.

Currently, China restricts foreign auto firms to a maximum 50 percent ownership of joint ventures with local companies. Hopefully, these tensions will ease out with the second round of trade talks scheduled to take place in Washington this week. Tesla's Chief Executive Officer, Elon Musk went so far as to say that they were creating an uneven playing field.

What's more, China continues to become an increasingly important market for electric auto manufacturers and in the past year, EV sales have increased by 149 per cent.

Tesla was in talks with the Shanghai municipal government on building a factory at Lingang New City previous year, but the negotiations did not come to fruition due to differences on the ownership structure.

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