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Tesla could start producing cars in China within three years, Chief Executive Elon Musk said today on the company’s Q3 earnings call.
Musk said the the factory will produce “at least a couple hundred thousand vehicles per year, maybe more.”
The Wall Street Journal reported last week that Tesla and the Shanghai municipal government have reached an agreement for a new factory that would allow Tesla to build cars in the country without needing to partner with a local manufacturer. However, the cars produced in the country will still be subject to a 25% import tariff.
Musk said the factory will produce Model S and Model X, but is largely intended to manufacture the Model 3 and the forthcoming Model Y crossover. “It’s really the only way to make the vehicles affordable for China,” Musk said.
About 15 percent of Tesla’s $7 billion in revenue last year was generated in China, according to data compiled by Bloomberg.