China said Tuesday it will allow full foreign ownership of automakers, a move that would allow Tesla to own its own production facility in the country.
Restrictions will be lifted for electric vehicle manufacturers first, as soon as this year. Tesla would then be able to own a factory of its own in the country. Previously, automakers needed to work through state-owned partners.
Tesla currently faces a 25 percent import tax on its cars in China, which pushes the sticker price up considerably for consumers. The company had been negotiating a joint venture to produce its cars in the country, but Tuesday’s announcement means Tesla can pursue a facility without ownership restrictions. It would allow the company to avoid an import tax and offer its cars at a lower price without having to share details and proceeds of its operations with a state-owned partner.
Electric vehicles have been among the products brought into recent trade conflicts with China. Fortunately, negotiations are now moving in the right direction for EVs.