Tesla will now be able to produce its electric vehicles in Chinese markets. The automotive company was added to the list of companies that are allowed to produce vehicles in the region, which is decided on by the Ministry of Industry and Information Technology.
Tesla will now build its first manufacturing facility outside the United States, which will be located in Shanghai and will cost $2 billion. The company is now attempting to begin production of Model 3 vehicles at the new Shanghai factory by November.
If Tesla could accomplish this, it would mean it would not have to pay for shipping or tariffs when selling its vehicles in Chinese markets. Tesla has also indicated that it began bringing machinery into the factory in the second quarter, in order to prepare for approval.
EV Production Agreements
Tesla Was Recently Approved to Produce EVs in Chinese Markets
Trend Themes
1. Electric Vehicle Production - The approval for Tesla to produce EVs in Chinese markets presents disruptive innovation opportunities in expanding the global electric vehicle manufacturing sector.
2. Manufacturing Facilities in China - Tesla's decision to build its first manufacturing facility outside the United States in Shanghai highlights disruptive innovation opportunities for international automotive manufacturing in China.
3. Eliminating Shipping Costs and Tariffs - Tesla's ability to produce Model 3 vehicles in the new Shanghai factory by November could create disruptive innovation opportunities by reducing costs associated with shipping and tariffs in Chinese markets.
Industry Implications
1. Automotive Manufacturing - The approval for Tesla to produce EVs in Chinese markets indicates disruptive innovation opportunities in the automotive manufacturing industry, particularly in the electric vehicle sector.
2. International Manufacturing - Tesla's decision to build its first manufacturing facility outside the United States in Shanghai suggests disruptive innovation opportunities in the international manufacturing industry.
3. International Trade - Tesla's ability to potentially eliminate shipping costs and tariffs in Chinese markets presents disruptive innovation opportunities in the international trade industry.