Tesla has been granted permission to build a factory in Shanghai, the Wall Street Journal reports, making the electric-car company the first foreign auto firm to have a wholly-owned facility in China.
The new plant is expected to manufacture 500,000 vehicles a year within the next decade, according to Shanghai authorities. China is Tesla’s second largest market, with some 17,000 cars being sold in 2017. In the same year, sales of electric vehicles across China reached 580,000, according to IHS Markit.
Tesla is capitalising on the opportunity granted by the Chinese government earlier this year to foreign auto companies, whereby rules forcing overseas firms to enter into joint ventures with domestic brands are to be phased out.
Under the new system, Tesla will be able to keep all of its profits and will not be obliged to share intellectual property secrets with the venture partner.