Tesla Motors primarily manufactures its cars in California, but CEO Elon Musk intends to change that. As reported by The Wall Street Joural Musk said that Tesla will start building autos in China as a way to offer its cars to the country at lower prices. He believes that a local production facility could cut the cost of Tesla cars by a third due to significantly reduced shipping costs and the lack of import fees. Of course, Musk’s plan is easier said than done: China prevents foreign car makers from running manufacturing plants without a Chinese partner, so Tesla will need to buddy up with someone in the country to make its plans work.
Despite the challenges, there’s a big incentive for Tesla to increase its operations in China. Nearly 20 million cars were sold in the country last year, making it the biggest auto market in the world — and China has been aggressively pushing lower-emissions vehicles. Right now, Teslas carry a tremendous cost, with the base Model S starting at the equivalent of $106,000, significantly more than it costs buyers here in the US. China currently offers buyers big incentives for lower-emission vehicles, but a local plant would still be a big help towards cutting the cost of Tesla cars in the country.
[Image credit: ChinaFotoPress/Getty Images]