The Borneo Post

After Tesla deal, Shanghai to speed up cancellati­on of limits

- By David Stanway

SHANGHAI: Shanghai will accelerate efforts to cancel restrictio­ns on foreign investment in the auto manufactur­ing sector, a government official said on Wednesday, a day after Tesla said it would build a wholly owned auto plant in the city.

Earlier this year, China said it would scrap foreign ownership caps for companies making fully electric or plug-in hybrid vehicles in 2018 and all automotive ventures by 2022. The announceme­nt marked a major policy shift in the world’s top car market that has capped foreign ownership in the sector at 50 percent for over two decades.

In line with state plans, we will speed up the cancellati­on of foreign ownership restrictio­ns in the car manufactur­ing sector. Huang Ou, deputy director of the Shanghai Commission of Economy and Informatio­n Technology,

Huang Ou, deputy director of the Shanghai Commission of Economy and Informatio­n Technology, told reporters at a press conference that the city government was engaged in preparatio­ns to support the Tesla project, set to be Shanghai’s biggest foreign-invested project.

“The next step is for the city government to do the support work to allow the project to go into operation as quickly as possible,” he said.

“In line with state plans, we will speed up the cancellati­on of foreign ownership restrictio­ns in the car manufactur­ing sector,” he said.

Huang declined to comment, however, on the size of the project or when the constructi­on of a plant with capacity to produce 500,000 Tesla battery electric cars a year - large by auto industry standards - would start.

Tesla Inc Chief Executive Officer Elon Musk landed a deal on Tuesday to build a new and wholly owned auto plant in Shanghai, the company’s fi rst factory outside the United States. It would double the size of the electric car maker’s global manufactur­ing.

The deal was announced as Tesla raised prices on US-made vehicles it sells in China to offset the cost of tariffs imposed by the Chinese government on US imports in retaliatio­n for President Donald Trump’s heavier duties on Chinese goods.

An auto assembly plant half the size of the envisioned Tesla Shanghai plant would normally cost US$ 1 billion to build, according to automotive industry officials and experts.—

 ??  ?? Checking out a Tesla Model 3 car during a media preview at the Auto China 2018 motor show in Beijing.
Checking out a Tesla Model 3 car during a media preview at the Auto China 2018 motor show in Beijing.

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