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Tesla jumps on report that it will soon be able to produce cars in China

Published 06/20/2017, 08:52 AM
Updated 06/20/2017, 08:52 AM
© Reuters.  Tesla shares move higher on reported production agreement in China

© Reuters. Tesla shares move higher on reported production agreement in China

Investing.com – Shares in Tesla rose nearly 2% in pre-market trade on Tuesday on the back of a report that the firm will soon reach an agreement to produce vehicles in China.

The agreement with the city of Shanghai would allow Elon Musk’s company to build facilities in its Lingang development zone and could come as early as this week, Bloomberg reported citing people familiar with the matter.

If agreed, Tesla would avoid a 25% import tariff that jacks prices on its Model S sedans and Model X sport utility vehicles.

While the agreement may be key as the electric car maker saw revenue in China triple to more than $1 billion in 2016, Tesla denied a similar report earlier this year that it was to start production in China.

Shares in Tesla (NASDAQ:TSLA)were last up 1.54% to $375.50. Shares had soared nearly 3% in the after-hours market when the story broke late on Monday.

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