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Blog Report: Tesla's Plan for a Chinese Factory in Trouble

Discussion in 'Tesla, Inc.' started by TMC Staff, Feb 15, 2018.

  1. TMC Staff

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    Tesla said last year that it was working with Shanghai’s government on a plan to build a factory in China, however a Bloomberg report says the deal may be in jeopardy. Bloomberg cites people with direct knowledge of the situation saying the two sides disagree on the factory’s ownership structure. China’s central government says the plant must...
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  2. renim

    renim Member

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    my guess,

    Tesla has the right to manufacture on Chinese soil (at a Special Economic Zone) but due to not having a 50% local automotive partner, those cars will still be treated as full imports as far as imports tariffs, and ZEV credits are concerned.

    so Shanghai government can facilitate a Tesla factory
    but Beijing government manages import tariffs and ZEV credits.
     
  3. bobowah

    bobowah New Member

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    Shanghai area requires you to partner with a local Chinese company whom will steal your IP.

    @tesla as a suggestion look at that Kunshan area Suzhou Province next to Shanghai if there is still real estate available to build there. City and County officials are more open to 100% ownership... And several of your US owned suppliers with China operations are there already.
     
  4. Ulmo

    Ulmo Active Member

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    Exactly, which we've learned China will use to subvert US interests every time, in this case, the goals and successes of Tesla and everyone involved with it.

    That certainly sounds better, but I wonder if China is the best target for EV profitting if they already have competent manufacturers of their own for their own people. Perhaps getting some of their money is a good idea if the downsides are little.
     
  5. Mo City

    Mo City Member

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    This is why I've never felt good about Tesla having a gigafactory in China. I understand the natural fit and the huge profit potential. This would take Tesla to another level.

    But IP concerns should stop this from happening. No matter what is negotiated and put in writing, the intellectual theft from Tesla will be vast.
     
  6. Sean Wagner

    Sean Wagner Member

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    I remember a German wrote how his company sold a cement factory [if I recall correctly] to China. After a while, they started to wonder why no orders for spare parts were coming in - turned out the entire factory was being copied and sold all over the country.
     
  7. Rob R

    Rob R Member

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    I thought Tesla makes it's IP open source anyway, so the usual concerns would not really apply here?
     
  8. ChicagolandMX

    ChicagolandMX Member

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    There is a licensing agreement to use the IP.
     
  9. ggr

    ggr Roadster R80 537, SigS P85 29, M3P 80k

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    Their patents are open, but there is still a lot of trade secrecy. Like some of their production line processes, what machinery they are using, who supplies stuff, all sorts of things. They still don't allow photography when you do a factory tour, for these kinds of reasons.
     
  10. thecloud

    thecloud As rhythm raced inside, the ship came alive

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    There are two different ways to read that headline. In one reading, the factory doesn't yet exist and Tesla's plan is in trouble; in the other, it already exists but Tesla has a plan to get it out of trouble.

    English: much tricks, such subtle.
     
  11. drinkerofkoolaid

    drinkerofkoolaid Active Member

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    My view based on observations I’ve made about Tesla in China. Tesla already works with some Chinese suppliers and employs a good number of people directly and indirectly in numerous Chinese cities. It’s very possible Chongqing or Tianjin might be the cities Tesla is eyeing for environmentally friendly factories. These “special regions” not currently fully occupied, that have many advantages to Shanghai, including sections intended for specialized foreign investment that as I understand it, are sometimes exempt from the requirement to have a 50:50 partnership.

    This doesn’t mean Tesla isn’t also planning production in Shanghai! There are certain towns/“special cities” that are being developed into Hubs for clean energy production and Green cities.

    As a reminder:
    Tesla in contact with Shanghai to build plant: MOC - Xinhua | English.news.cn
     

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