Californian electric automaker Tesla looks east.
One of the largest automotive markets in the world, or the largest – depending on who you ask, is China. And it naturally follows that electric cars are slowly taking root as real alternatives to buyers, just as they are pretty much everywhere else in the world.
Because of the sheer volume of buying power in China, the growth potential for a company like Tesla is something that’s tough to ignore, and if a report from a Chinese media outlet proves accurate, Tesla is closer than we expected to securing a location for a new factory.
Specifically, the report says that representatives from the company had made a trip to Suzhou in early March, a city that sits just west of Shanghai, to discuss their plans with the local government. Obviously, details remain scarce until Tesla chooses to officially announce the move, but that’s assuming the report is wholly accurate.
With a manufacturing location like that, Tesla would be able to make its existing models and future offerings like the soon-to-be-announced Model 3 more affordable as well as being able to tailor to the population’s specific needs.
Authorities in China slap high tarrifs on imported cars, increasing the cost of already premium-priced cars such as the Model S to unrealistically high points. In short, if Tesla is to make a dent in the Chinese market, it has to get in at the ground floor.
But sourcing a factory location in China is winning only a tenth of the battle, as there are regulatory hurdles set up to ensure companies do not take advantage of the country’s eager buying market and cheap labour.
Automakers would typically have to partner with a local manufacturer and involve them quite heavily in the production process, which, safe to say, isn’t something we assume Tesla would be happy to do.
That hasn’t stopped other automakers from taking the plunge, as nearly every local automaker there has an established relationship with a European, American, or Japanese marque.
