In as a little as two years, electric car company Tesla Motors might be producing its vehicles in China.
Reports indicate that CEO of Tesla Elon Musk has been participating in discussions with potential Chinese companies that he might use as a partner in order to create a domestic production facility in mainland China.
The news coincides with reports earlier this year that longtime Apple partner Foxconn is aggressively entering the electric vehicle market and would be ready to produce vehicles in as little as two years.
According to sources that wished to remain anonymous the Tesla discussions have been very encouraging yet there was no word on who, exactly, Tesla was talking to.
If Tesla is indeed successful in building a Chinese production facility, the cost of Tesla vehicles in the country could fall by as much as a third, allowing the company to establish a much lower price point.
This would ensure Tesla’s leadership status amid a flurry of home-grown electric vehicles that, while lacking the Tesla brand name, look set to enter the market at much lower prices than the U.S. built Teslas.
It currently costs a little less than $103,000 to purchase a new Tesla Model S in China.
While it has not yet been officially confirmed that Tesla would be coming to China, a company spokesperson indicated that it was a likely move.
The spokesperson said, “We are in discussions with state and national government officials. Any decision would come as a function of those discussions. We hope to announce something definitive soon.”
It is not a surprise that Tesla would work with a partner, as Chinese law typically requires foreign car companies to join forces with a local company before producing vehicles. There also appears to be many contract manufacturers, such as Foxconn, keen to enter the electric automobile market, which bears considerable resemblance to the consumer electronics market they’ve come to dominate.
Tesla has also been talking with Chinese internet company Baidu about possibly providing navigation services for their vehicles.
This year, Tesla has sold around 3,000 cars in China. The company considers these sales figures to be weak, and Tesla has been recently cutting jobs in the country.
A domestic production facility might just be what the company needs in order to thrive in China.