Tesla secures Shanghai site for $2 billion China Gigafactory China 17:47

A Tesla logo is seen in Los Angeles

A Tesla logo is seen in Los Angeles

Tesla bought in China a land plot for the construction of its first factory Gigafactory outside the United States.

"Securing this site in Shanghai is an important milestone for what will be our next advanced, sustainably developed manufacturing site", Robin Ren, Tesla VP of worldwide sales, said in a statement.

In May, Tesla announced it was cutting its vehicle prices in China after Beijing conceding from pressure from the Trump administration and announced it would cut tariffs on imported cars from 25 percent to 15 percent.

US carmaker Tesla Inc. has just purchased a tract of land measuring 864,885 square meters from Shanghai municipal government, to set up its first overseas plant in the city, said a source of Shanghai Lingang Area Development Administration Wednesday.

In July, Tesla signed a long-anticipated deal with Shanghai authorities to open a plant in the Chinese city with an annual capacity of 500,000 cars, which would double the size of its global manufacturing and help lower the price tag of Tesla cars sold in China, according to Reuters.

Shanghai is a centre of China's motor industry and home to state-owned Shanghai Automotive Industries, the main local manufacturer for GM and VW. However, Tesla has said that it will take 2-3 years to construct it, and another 2-3 years to get it running at full potential.

Chief executive Elon Musk said in a September 30 letter to USA regulators that the company was "very close to achieving profitability".

Tesla's 5 billion dollar (£3.8 billion) Nevada battery factory was financed with help from a 1.6 billion dollar (£1.2 billion) investment by battery maker Panasonic.

The California-based company was among the few Western automakers to stall its arrival in China until the country relaxed its foreign ownership requirements. The electric vehicle maker has purchased a massive patch of land on which its vision will become reality.

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