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Tesla Agreement With China

Written By: Chris - Apr• 13•21

A gigafactory in China would be Tesla`s first outside the United States. The original gigafactory is still under construction in the Nevada desert, and a second one is under construction, but in service, in Buffalo, New York. While Nevada Gigafactory focuses primarily on manufacturing batteries for Tesla cars (in partnership with Panasonic), Tesla CEO Elon Musk said the ultimate goal for its giant factories is to produce the company`s cars there as well. Musk also said earlier this year that he expected Tesla to eventually open 10 to 12 gigafactories around the world, with an announcement in Europe likely to follow behind China. The equipment manufacturer now sees an advantage in accelerating research on reducing battery costs to help electric cars achieve price parities with carnivores and then supplant them. “What we`re doing is trying to innovate in the structure and chemical system that will allow Tesla cars to drive longer range at a better price,” Zeng said, clinging to an armchair in a fifth-floor meeting room with a Chinese painting on the wall and a tea kit on a table. “That`s probably why Tesla likes us.” The repatriation of China`s profits has long been a complex and difficult issue for foreign companies with … The battery supplier has an eye on the development of links with Tesla abroad, including the carmaker`s first European factory under construction outside Berlin. CATL, which also supplies the Volkswagen and BMW Group, is building its own factory in central Germany and encouraging Chinese suppliers to set up field offices there.

Electric vehicles account for 3% of the country`s automotive market (nearly six times more than in the United States) and control between 50 and 77 percent of the global power battery production market. It produces 99% of the world`s electric buses. Aside from IP concerns, foreign companies traditionally believe that partnerships with Chinese companies are necessary to ensure favourable supply chain agreements with local producers and to guide local strategies. Cooperation with a national supplier such as CATL could keep in mind Tesla`s relationship with the Chinese authorities, which have been crucial to local success. In addition, Zeng is a member of the Chinese People`s Political Consultative Conference, the advisory body of senior management. He made proposals there to continue to focus on renewable energy. Tesla is very different from other foreign automakers, because it is the first to build a Chinese factory, without any support from a local company. The land agreement is an important step towards the company and its chief executive, Elon Musk, who manufactures on-site cars in China for the fast-growing market, although Beijing`s tariffs on U.S.-made products have allowed it to raise the price of its imported models. The opening of a Chinese factory was the key to avoiding a further escalation of tariffs imposed by the United States and China. The end of political negotiations is not yet in sight, although the White House said in December that it had reached a “phase one” agreement with Beijing on “substantial purchases” of U.S.

industrial products, including agricultural, energy and manufacturing products. A signing ceremony is scheduled for January 15, the President tweeted. Li Shufu, the founder of Geely, a major automaker in east China`s Zhejiang province with no foreign partners, said in an email interview in 2014: “The ceiling of [50% ownership] has hindered fair, open and transparent competition that undermines consumer interests and the overall competitiveness of the Chinese auto industry.” Zeng Yuqun, CEO of CATL, says he is partnering with Elon Musk, Tesla`s CEO.

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