Tesla may open plant in Suzhou in move to reduce costs: report

Source:Global Times Published: 2016-3-22 21:08:01

US premium electric car producer Tesla Motors Inc may locate a manufacturing plant in Suzhou, East China's Jiangsu Province, a media report said Tuesday.

According to a document circulated on the Internet on Tuesday, the Suzhou government held a meeting on March 13 to discuss a Tesla project, industry portal d1ev.com reported.

The document also said that executives of Tesla had visited Suzhou on March 17 and 18.

Under Chinese regulations, Tesla will need to secure a local partner before it can produce cars in the Chinese mainland.

A spokesman at Tesla China declined to comment on the matter when contacted by the Global Times on Tuesday.

Tesla has been looking to open a manufacturing plant in China, in a bid to reduce costs.

The Wall Street Journal reported in October 2015 that local production could help cut the price of Tesla cars by around one-third, due to savings on shipping costs. Import tariffs would also be reduced with local production.

An entry-level Tesla Model S is sold at around 673,000 yuan ($103,709) in the mainland at present, compared with a suggested retail price of around $71,100 in the US, according to public information on the Internet.

China's electric car sector is booming, mainly driven by government support.

In the first two months of this year, sales reached 35,726 units of new-energy vehicles, up 170 percent year-on-year. Sales of pure electric cars reached 24,835 units, up 270 percent on a yearly basis, according to data from the Ministry of Industry and Information Technology.

But it appears that Tesla isn't growing in line with the market.

The company doesn't provide regional sales breakdowns, but according to its annual report released on February 24, revenues in China dropped 33 percent year-on-year to the equivalent of $318.5 million in 2015.

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