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Article snippet: BEIJING — Tesla is moving closer to becoming the first foreign car company to have a wholly owned manufacturing operation in China, a deal that would test the relationship norms between a foreign automaker and the Chinese government. For Tesla and other manufacturers, their production options in China are limited by the government. One option is to set up a joint venture, sharing much of their technology and profits with a Chinese partner. The other is to manufacture in a free-trade zone in China, protecting their secrets but forking over steep tariffs. Carmakers usually end up in a joint venture. That Tesla is striking a different deal reflects China’s global ambitions to dominate the electric car industry. The company has a preliminary deal with the Shanghai municipal government that would give Tesla ownership of its facility, two people familiar with the negotiations said on Sunday. The operation would be located inside a free-trade zone, said the two people, who insisted on anonymity because they were not authorized to discuss the talks. Being inside a foreign trade zone means that unless Tesla can negotiate a special exemption, the cars could still be subject to China’s steep tariffs — treated as though they were still being shipped from outside China even though they were being produced in the country. The preliminary deal still offers Tesla control over its trade secrets and may give the company leverage to negotiate better terms with the Chinese governmen... Link to the full article to read more