Tesla sets up wholly-owned subsidiary in Shanghai

Shanghai (Gasgoo)- Tesla (Shanghai) Co. Ltd, Tesla's Shanghai-based subsidiary, gained the operating license approved by the Market Supervision Administration of Shanghai Pudong New Area on May 10, according to the information released by the National Enterprise Credit Information Publicity System. 

Strikingly, it is revealed that Tesla Motors HK Limited will hold the 100% stake of Tesla (Shanghai) Co., Ltd. with a registered capital of RMB 100 million. The Shanghai-based company has a business range covering the technology R&D, service, consultancy and transfer of BEV's parts, batteries, energy storage equipment and photovoltaic products. Besides, it provides such services in the wholesale, commission agency (excluding auction) as well as import and export of the abovementioned products, and also offers the related supporting services, EV exhibition and product promotion.

It is noteworthy that the company hasn't covered the manufacturing or sales of NEVs. Zhu Xiaotong, who has served as general manager of Tesla China for nearly four years, will act as chairman and director of Tesla (Shanghai) Co., Ltd.. 

The establishment of Tesla (Shanghai) Co., Ltd. was Tesla's first subsidiary in China after the country moved the caps on foreign ownership of auto JVs.

Tesla Motors HK Limited has set up more than ten enterprises in China. Among them, Tesla (Beijing) New Energy R&D Co., Ltd., founded in October, 2017, engages in technology R&D of BEVs, parts, batteries, energy storage equipment and photovoltaic products, while the rest companies all specialize in the importing and marketing businesses of vehicles.

Tesla (Beijing) New Energy R&D Co., Ltd. was registered with a total capital of $ 2 million (around RMB 1.267 million), which is far less than that of the newly-built Tesla (Shanghai) Co., Ltd. 

Although Tesla registered the new company in Shanghai, the operating license of the new company showed that China has not permitted Tesla to manufacture vehicles locally yet. The biggest obstacle that Tesla faces is acquiring the manufacturing qualification of NEVs in China first. 

Reportedly, Tesla and Panasonic are expected to co-build a new factory in China to manufacture EVs and lithium-ion batteries. Kazuhiro Tsuga, CEO of Panasonic addressed in a telephone conference that Tesla will manufacture products in China and they will co-produce lithium batteries.

Elon Musk, CEO of Tesla twittered last month that Tesla will see profit and positive cash flow in the third and fourth quarter. Earlier this month, he said the firm could soon unveil the location of a Chinese gigafactory.