Blog With Lifted Restrictions in China, Tesla Can Own Its Own Factory

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.

 

[TriTexan]

Well - the story doesn't note this, but I thought there was a "by 2022, perhaps" timeline attached to this. So no - Tesla, nor anyone else can't own their own factory at this point or any time in the foreseeable future. Four years is a L O N G wait. And that doesn't count the time it takes to build a factory and bring it online.

Even IF China follows through, this gives their own car companies a 4-5 year headstart, making any promise of open competition meaningless in up-and-coming races like EV's where few if any existing companies have factories ready to go to manufacture these newer types of vehicles.

This is classic China game playing - they release a headline that appears to appease negotiations, but in the end it is meaningless. China can revoke anything any time they want. Building a factory or investing in China, even if they say you can own your factory NOW, doesn't mean they won't come in and forcibly take it from you in a year, or two, or five.

China has a long history of forcibly taking whatever they want or need from their own people and native companies. There's absolutely no reason to trust them and invest your company's millions or billions into factories and other hard-to-make infrastructure and assets.

Maybe I'm missing something - but it appears Xinping has absolute power at this point - so someone would have to explain in great detail how any foreign company would trust anything China or Xinping says at this point.

 

[mongo]

Well - the story doesn't note this, but I thought there was a "by 2022, perhaps" timeline attached to this. So no - Tesla, nor anyone else can't own their own factory.

This is classic China game playing - they release a headline that appears to appease negotiations, but in the end it is meaningless. China can revoke anything any time they want. Building a factory or investing in China, even if they say you can own your factory NOW, doesn't mean they won't come in and forcibly take it from you in a year, or two, or five.

China has a long history of forcibly taking whatever they want or need from their own people and native companies. There's absolutely no reason to trust them and invest your company's millions or billions into factories and other hard-to-make infrastructure and assets.

Maybe I'm missing something - but it appears Xinping has absolute power at this point - so someone would have to explain in great detail how any foreign company would trust anything China or Xinping says at this point.

BEV/PHEV -2018/ nowish
Commercial vehicles not covered above - 2020
Other vehicles not covered above - 2022

 

[Electroman]

Correct me if I am wrong, the 2022 timeline is only for ICE car manufacturing. For EVs it is with immediate effect.

 

[Jeff Hudson]

Well - the story doesn't note this, but I thought there was a "by 2022, perhaps" timeline attached to this. So no - Tesla, nor anyone else can't own their own factory at this point or any time in the foreseeable future. Four years is a L O N G wait. And that doesn't count the time it takes to build a factory and bring it online.

Even IF China follows through, this gives their own car companies a 4-5 year headstart, making any promise of open competition meaningless in up-and-coming races like EV's where few if any existing companies have factories ready to go to manufacture these newer types of vehicles.

This is classic China game playing - they release a headline that appears to appease negotiations, but in the end it is meaningless. China can revoke anything any time they want. Building a factory or investing in China, even if they say you can own your factory NOW, doesn't mean they won't come in and forcibly take it from you in a year, or two, or five.

China has a long history of forcibly taking whatever they want or need from their own people and native companies. There's absolutely no reason to trust them and invest your company's millions or billions into factories and other hard-to-make infrastructure and assets.

Maybe I'm missing something - but it appears Xinping has absolute power at this point - so someone would have to explain in great detail how any foreign company would trust anything China or Xinping says at this point.

You need to read the news as reported by an actual news source like the Washington Post to get more details. Here is a link and a quote of the most pertinent aspect of the article.
China to allow full foreign ownership in auto industry

"Limits on foreign ownership of electric vehicle producers will be eliminated this year, the Cabinet’s planning agency said. That will be followed by a similar repeal for makers of commercial vehicles in 2020 and passenger vehicles in 2022."

This is great news. Now Tesla can get on with installing Superchargers in China without too much concern about their future. We need to keep in mind the China auto market is the largest in the world and as such it simply cannot be abandoned to the other manufacturers.

 

[adaptabl]

Wow.. If you think Tesla has quality issues now just wait for a made in China version.

 

[djplong]

I'm less worried now that Tesla can own the factory 100%.

 

[SageBrush]

This is awesome news.