As the world’s largest automotive market, it’s essential for Tesla’s future that it become successful in China, and that may involve manufacturing its vehicles in the country directly. According to CEO Elon Musk, if Tesla were to manufacture its vehicles locally, it would allow the company to significantly reduce the price of the models it sells in China, which would help make them more popular with Chinese consumers. Tesla is already in negotiations with officials in China, and local production could begin within the next couple of years.
Tesla Motors could begin producing cars in China in two years, Chief Executive Elon Musk said, adding that local production had the potential to slash the sales prices of its models in the world’s largest auto market by a third. Tesla’s negotiations with officials on Chinese production have been quite encouraging and it is likely the company will cooperate with a local partner, Musk said, according to Chinese language transcripts of remarks made Thursday and Friday that were provided by the company. The California-based automaker has struggled with weak sales in China, leading to job cuts this year. Domestic media has put the headcount reduction at 30 percent of its 600 staff. The company, which does not regularly release China sales data, said in a release on Friday that it had sold 3,025 Model S cars in the country from January to September. Musk also said Tesla is already working with Chinese Internet company Baidu on GPS navigation and automated driving. He added that Tesla’s giant $5 billion battery plant in Nevada, known as the “gigafactory” would produce its first batch of batteries next year, estimating that the plant would reach full capacity in two to three years.
