This strategic investment aligns multiple sweet spots: in a single stroke Elon Musk is increasing Tesla’s footprint in China, the world’s biggest auto market, boosting production capacity and export potential while facing Chinese EV startups head-on.
In a development that marks Tesla’s latest attempt to boost its footprint in China, as per a local business registration filing, the luxury carmaker has registered a financial leasing company in China – the world’s largest auto market.
According to China’s National Enterprise Information Publicity System, California-based Tesla has opened a wholly-owned financial leasing unit in Shanghai’s free trade zone with a registered capital of $30 million.
Its scope of operations includes leasing and consultancy with Zhu Xiaotong, Tesla’s boss in China being its legal representative.
Tesla declined to comment.
As reported earlier this month, Tesla has begun a tender process to build its Shanghai Gigafactory and at least one contractor has started purchasing materials.
Its Shanghai Gigafactory, its first in China, assumes significance given that China is the world’s biggest market for automobiles and that Tesla faces rising competition from domestic electric vehicle carmakers the region.
Tesla’s earnings have taken a hit by U.S. import tariffs.