Tesla could be on the verge of announcing a Gigafactory in China after registering a new company in Shanghai’s Free-Trade Zone.
The Street reports that the electric automaker recently established Tesla Shanghai Co. Ltd as a wholly-owned subsidiary of Tesla’s Hong Kong division. The formation of this company comes shortly after Elon Musk said Tesla was edging closer to an announcement regarding a Chinese factory.
Musk has previously said that future Gigafactory locations will manufacture both batteries and cars. This would be particularly helpful in China as it would allow the firm to avoid the costs of importing finished goods.
Tesla wants to create Gigafactories on various continents
China recently announced that foreign companies can operate 100 per cent-owned factories in the country, making the market a particularly tantalizing destination for Tesla. What’s more, China continues to become an increasingly important market for electric car manufacturers and in the past year, EV sales have increased by 149 per cent.
If Tesla were to open a Gigafactory in China to produce batteries and cars, it would allow it to slash the costs of the models it sells there by avoiding expensive import tariffs.
Tesla also intends on building a Gigafactory somewhere in Europe in the future.