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Tesla signs deal to open Shanghai factory

by Justin King
Tesla signs deal to open Shanghai factory

The factory is expected to have an annual capacity of a half million vehicles.

Tesla has finally signed a formal agreement with Shanghai officials to build its first factory in China.

Other automakers long ago capitulated to China's strict foreign ownership requirements for auto factories, requiring US companies to establish 50:50 joint ventures with local firms to build cars in the world's largest auto market.

Tesla held out as the political dynamics shifted and China faced increasing pressure to relax its restrictions. The California-based automaker will apparently be the sole owner of its Shanghai factory.

Local media reports suggest construction will begin next year and the factory will have an annual output capacity of a half million vehicles.

In the meantime, Tesla has reportedly hiked its prices for imported vehicles in China to offset costs of increasing tariffs.