By Sophie Song - Hip Beijing drivers can breath a sigh of relief, not due to any easing of the nation's notoious air pollution but because soon they'll be able to avoid a 25 import tax on Tesla electric cars when the company opens a plant in China in a few years.
Tesla Motors Inc NASDAQ:TSLA CEO Elon Musk said on Monday that the company will begin manufacturing its electric vehicles in China within the next three to four years, as well as building a charge station network independent from State Grid.
“At some point in the next three or four years we’ll be establishing local manufacturing in China,” Musk said. “China is very important to the future of Tesla. We’re going to make a big investment in China in terms of charging infrastructure.”
Musk introduced the Model S electric vehicle at the Geekpark Conference in Beijing on Monday, and told reporters today that the Palo Alto, Calif.-based company is planning to invest hundreds of millions of dollars in the country, Bloomberg reported.
Producing in China would allow Tesla to avoid China’s 25 percent import tariff and offer its vehicles for lower prices to consumers in the world’s second-largest economy. The Model S will start from 734,000 yuan ($118,000) in China, compared to $71,000 in the U.S.
Higher prices could be just one of the hurdles Tesla must overcome to achieve its sales goals in China. Electric vehicle adoption has been slow in the country so far, as much of the country lacks the infrastructure needed to support them, according to CNN. In its ongoing battle against air pollution, the Chinese government is offering subsidies for electric car owners, but has not achieved great success so far.
The company’s plan to build a charging station network might help adoption, but some experts are skeptical on that account as well.
“Tesla CEO in China, says will build a charging station network independent from State Grid,” Bill Bishop, a China expert and the curator of the popular Sinocism China Newsletter, said on Twitter. “I needed a good laugh this evening.”