Tesla’s Dream to Transfer in China Faces Threat

The biggest electric automaker in the U.S., Tesla Inc., is in danger of being transferred to an expensive place in China because Elon Musk, CEO of Tesla, can’t close a deal to open a factory in the country.

Tesla in danger to transfer in an expensive place in China. 

Seven months after the automaker announced that it was working with the government of Shanghai to explore assembling cars, a deal has not been finalized since the two groups disagree on the ownership structure for a proposed factory, stated the people with a direct knowledge of the situation.

The central government of China says that the factory must be a joint venture with local partners, while Tesla wants to own the plant completely, according to the people.

As of now, all foreign carmakers must partner with Chinese companies in order for them to manufacture in the country.

The sluggishness of the electric automaker in starting local manufacturing means that it is fumbling a chance to capitalize on China’s hard sell for new-energy automobiles, including EVs, plug-in hybrids, and fuel-cell vehicles.

The administration of President Xi Jinping wants to scrub notorious air pollution and lessen the dependence on imported oil.

“It’s a market they need to get a foothold in,” Jeffrey Osborne, an analyst, stated.

However, Tesla did not give any comment about its negotiations with the Chinese government over local production. The Ministry of Commerce, National Development and Reform Commission, and the Shanghai Economy and Information Commission did not also give any comment about the matter.

GM to Close One of its Plants in South Korea

In other news, General Motors announced that it would close one of its four plants in South Korea and incur an $850 million damage charge as part of a restricting of its money-losing business in Asia’s fourth-biggest economy.

According to the U.S. automaker, it would decide the future of its remaining South Korean operations amid ongoing discussions with the government and labor unions on how to cut costs and make the business profitable.

“Time is short and everyone must move with urgency,” stated Dan Ammann, president of General Motors.

This is the latest move the automaker has taken to put profitability and innovation ahead of sales and volume.

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