Technology Tesla Shanghai Gigafactory is officially rolling out cars in China

Tesla - carmaker apparently wants to produce in China

The US electrician Tesla wants to open according to a report for the first time a plant in China. But some points are not clear yet. The most important questions and answers.

According to a media report, US electric car maker Tesla could soon be producing vehicles in China for the first time, giving it better access to the world's largest passenger car market. The industry pioneer is about to reach an agreement with the Shanghai Municipality to build a factory, the financial news agency Bloomberg said, citing people familiar with the project. An agreement is still possible this week. However, according to the rules in China, Tesla needs a joint venture with at least one local partner.

Why is Tesla building a second factory?

© REUTERS Tesla: Apparently the US carmaker wants to produce in China. Photo: REUTERS

Because only then can the jump into the mass market succeed. The first and so far only factory in the California Fremont bursting soon at the seams - with approximately 100,000 vehicles of the series Model S and Model X. In parallel the electric car manufacturer drives straight the production of the compact Model 3 high, the first Tesla for the mass market is still in be delivered this year. The targeted number of 500,000 cars in 2018 and one million Tesla by the end of the decade are simply not possible with the former Toyota factory in California.

Does not Tesla build cars in the Netherlands?

Tesla maintains a factory in Tilburg, that's right. But it is not a production plant in which the components for the cars are manufactured. Rather, Tilburg is an assembly hall - California-supplied components and components from suppliers are assembled here into finished cars. Although that relieves the factory in Fremont, but it is not enough: Each body still comes from California and then has to be laboriously shipped.

Why should the factory be built in China?

Because electromobility is booming in China and Tesla has benefited so far. The company tripled its sales in China to more than $ 1 billion last year. With a separate factory, the growing demand could be served. In addition, Tesla would be treated better with a local manufacturing facility by the Chinese authorities than a mere importer. For example, with local production, Tesla could avoid import duties of 25 percent.

Does that affect the German carmaker?

Indirect. China wants to promote the sale of electric cars more vigorously to combat air pollution in large cities. The government in Beijing is planning to introduce a quota system for carmakers. Anyone who does not sell a certain share of electric cars in China from January 1, 2018, will face drastic penalties. VW, BMW and Co are unlikely to have a sufficient number of electric models in China at the turn of the year to be able to achieve the sales necessary for the quota - their electric projects will not be available until 2018 or even 2019 , If Tesla can position itself in China as a provider of competitive electric cars, it will be even harder for German manufacturers to catch up from 2019 onwards.

Does Tesla need more battery factories then?

Yes. The Gigafactory in Nevada, which is still under construction, will not be enough, despite its enormous dimensions, to populate a million electric cars with batteries - and still build the "Powerwall" home batteries. The factory also officially bears the name "Gigafactory 1". According to the Bloomberg report Tesla plans to complete its plans for up to three more Gigafactories this year. It would be logical for one of them to be built close to the potential vehicle plant in China. Europe is also talking about another battery factory.

The important role of joint venture partners

Does Tesla have any further connections to China?

Only in March, the Chinese Internet Group Tencent entered Tesla. Tencent had bought five percent of the Tesla shares, in the former value of about 1.8 billion dollars. To Tencent belongs among other things the messenger service WeChat. Not only messages can be sent via WeChat, but also food or taxes can be ordered. Through the partnership, Tesla could also establish itself on the Chinese mobility market without having to set up its own platform.

Who could become Tesla's joint venture partner?

That's still unclear. Tesla did not want to comment. Of course, a cooperation with SAIC is conceivable. The "Shanghai Automotive Industry Corporation" is the largest manufacturer in the country and belongs to the city government of Shanghai - so the rumored Tesla location.

German carmakers work together with others such as FAW, SAIC, BAIC, BYD or Brilliance. However, the partnerships are often not exclusive - Daimler is building the C- and E-Class with BAIC in China (the joint venture is called Beijing Benz) and with BYD the electric car Denza. Volkswagen works with FAW and SAIC. FAW also works with GM.

How important are the joint venture partners?

China is not allowed to produce cars without joint ventures with mostly state-owned manufacturers. Thus, they are irreplaceable. What significance they have not only for the production, but also the sale, Audi had to experience painful this year. So far, the Ingolstadt have been working together with FAW, as a partner in FAW-Volkswagen. FAW holds there 60 percent, Volkswagen 30 percent and Audi 10 percent. Audi had then announced that it would start a second joint venture with SAIC. A strategic decision to "share the risks and burdens", as Audi CEO Rupert Stadler emphasized. Even though Audi models are being built and sold, this new company is also operating as an independent company. Therefore, the dealers of FAW-Audi protested, they feared in-house competition from new dealers of SAIC-Audi. So they went into a kind of strike - until the agreement with the dealers in May, the Audi sales in China had slumped by up to 35 percent.