Shanghai could be the production hub for a US$9 billion Tesla hub, according to sources who spoke to Bloomberg.
A company owned by the Shanghai government, Jinqiao Group, has reportedly signed a non-binding memorandum of understanding with the US-based electric vehicle maker, said the source.
The deal would involve an investment of RMB30 billion (US$4.5 billion) from both Tesla and Jinqiao, totaling US$9 billion. A majority of Jinqiao’s investment would be in securing the land for the facility, according to the report.
Jinqiao’s listed entity, Shanghai Jinqiao Processing Zone Development Co., saw their stock jump almost 10 per cent following the news, before trading was suspended.
Tesla released their Model X for distribution in China just last week. The country hasn’t been an easy market for Tesla, though it’s expected to be the largest global market for connected, autonomous and electric vehicles. Several home-grown competitors have inched into the space, including NextEV and internet company LeEco, which is backing Faraday Future.
Bloomberg’s source claims that several cities are vying to partner with Tesla on the project, including Suzhou in Jiangsu province and Hefei in Anhui province. Recently Baidu announced that they would be testing their autonomous vehicles in Anhui province, due to the varied landscapes and favourable government conditions.