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posted by martyb on Monday October 23 2017, @05:05PM   Printer-friendly
from the preorder-on-banggood dept.

Tesla has reached an agreement to build a factory in Shanghai, China:

Tesla Inc. has reached an agreement with the Shanghai government to set up its own manufacturing facility in the city, the Wall Street Journal reported Sunday, citing people briefed on the plan.

The Palo Alto, California-based carmaker is working with the local government on the timing and details of an announcement, the people told the newspaper. The deal, which without a local partner likely won't negate China's 25 percent import tax, will still allow Tesla to reduce its production costs drastically, according to the report.

China is the world's largest market for automobiles.

Also at The Verge and WSJ.

Previously: Tesla's Big China Chances on Indefinite Hold


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Tesla's Big China Chances on Indefinite Hold 33 comments

Some have believed that China is Tesla’s most lucrative opportunity. A new report makes it look like that opportunity has been lost. “China plans to halt issuing permits to produce electric vehicles because of concern additional approvals may lead to a glut in the world’s biggest auto market,”Bloomberg reports. Without permits, no Chinese production. Without Chinese production, no chance to gain relevance in a market surrounded by high custom barriers, and subsidies that favor domestics. Without the world’s largest EV market, no chance for Tesla to maintain scale and relevance in the world.

There have been occasional rumors of Tesla starting production in China, and each time, it turned out to be wishful thinking. Chinese production never was as easy as the many -- always false -- rumors made it sound.

  • No foreign OEM may produce a car in China on its own. An at least 50:50 joint venture with a domestic maker is needed. There is talk that this may change some day, but so far, it has not.
  • Then there is the “strong suggestion” by the Chinese government to sell that domestically produced electric vehicle under a new Chinese brand, owned by the joint venture. There is no foreign-branded EV made in China. A few weeks ago, an electric car joint venture between Volkswagen and Anhui Jianghuai Automobile (JAC Motors) to make electric cars has been approved by Chinese authorities. The EVs “will be made and sold under a new brand and logo,” state-run Xinhua news wire reported. Its brand is Tesla’s strongest suit. In China, it would go wasted.
  • Then, to qualify for subsidies by the central government, the batteries used in the electric vehicle must be from an approved manufacturer, a source with in-depth knowledge of the business told me. There are only three approved battery makers, I was told, and they are all Chinese: BYD, Lishen, and CATL. Most of the value of an EV is in the battery.
  • And finally, the joint venture must secure a long list of licenses. The toughest to get is the one from the National Development and Reform Commission [NDRC], essentially the state planner. According to the Bloomberg report, the NDRC stopped issuing these licenses, after handing out 15 of them since 2016. The Volkswagen/JAC JV was the last enterprise to get one.

Source: Forbes [behind an ad-block blocker.]


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  • (Score: 5, Insightful) by DannyB on Monday October 23 2017, @05:44PM (15 children)

    by DannyB (5839) Subscriber Badge on Monday October 23 2017, @05:44PM (#586445) Journal

    Tesla has decided it is okay to turn over all its technology to China.

    In the long run, this could work out badly for Tesla.

    --
    People today are educated enough to repeat what they are taught but not to question what they are taught.
    • (Score: 2) by bob_super on Monday October 23 2017, @06:45PM (12 children)

      by bob_super (1357) on Monday October 23 2017, @06:45PM (#586483)

      Tesla lets anyone us their patents.
      Tesla cannot prevent anyone from taking their cars apart to clone them.

      What exactly do they have to lose by building there? Hopefully they keep their software keys secret already...

      • (Score: 2) by takyon on Monday October 23 2017, @07:11PM

        by takyon (881) <reversethis-{gro ... s} {ta} {noykat}> on Monday October 23 2017, @07:11PM (#586495) Journal

        I also doubt that Tesla's car trade secrets are as valuable as their battery trade secrets or SpaceX's trade secrets.

        --
        [SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
      • (Score: 1) by chucky on Monday October 23 2017, @07:22PM (10 children)

        by chucky (3309) on Monday October 23 2017, @07:22PM (#586500)

        I agree with you, but... Why would they need to keep their software keys secret? Traditional car makers are still not entering the EV market, not really. Electric versions of their regular models are nowhere near mass adoption. The sooner somebody takes it all, copies it and brings it to the market in large volume, the better for Musk. His current 'R&D lab' produces great ideas, but it's not profitable. The market should better be there before Tesla goes bankrupt.

        • (Score: 4, Insightful) by Phoenix666 on Monday October 23 2017, @07:34PM (9 children)

          by Phoenix666 (552) on Monday October 23 2017, @07:34PM (#586505) Journal

          I think it's because the pollution pumped out by China's unregulated factories is finally inciting serious enough backlash among the common people on the mainland. EVs will go a long way toward solving that. Also, the geopolitical benefits of divesting from fossil fuels interest Beijing.

          Both those things are good for China and good for the rest of the world, too. It would be especially good to see a competition heat up between China, the US, and Europe to see who can become the greenest, quickest, a la the Space Race.

          --
          Washington DC delenda est.
          • (Score: 2, Insightful) by Ethanol-fueled on Monday October 23 2017, @09:06PM (2 children)

            by Ethanol-fueled (2792) on Monday October 23 2017, @09:06PM (#586572) Homepage

            Not to mention starve the lifeblood of the Arab scum. Hopefully in another couple decades the savage fuckers will be back to sword warfare and living in huts and stone buildings.

            • (Score: 2) by Phoenix666 on Monday October 23 2017, @11:15PM

              by Phoenix666 (552) on Monday October 23 2017, @11:15PM (#586641) Journal

              That's a florid way to put it, but essentially correct.

              --
              Washington DC delenda est.
            • (Score: 2) by DeathMonkey on Tuesday October 24 2017, @06:17PM

              by DeathMonkey (1380) on Tuesday October 24 2017, @06:17PM (#586978) Journal

              So why did you vote for the guy doing the opposite?

          • (Score: 2) by DannyB on Tuesday October 24 2017, @01:52PM (5 children)

            by DannyB (5839) Subscriber Badge on Tuesday October 24 2017, @01:52PM (#586849) Journal

            It would be especially good to see a competition heat up between China, the US, and Europe to see who can become the greenest, quickest, a la the Space Race.

            That would be fantastic. America could also get in on the competition with "clean coal".

            Not that I like or advocate China's system, but I would simply observe one benefit of central control is that China could allocate resources to build enough charging infrastructure to make EVs practical. America won't do so unless it increases shareholder value. Tesla is building charging infrastructure. But the US is a mighty big land mass.

            Cutting off the oil wealth of the nutjobs in the Middle East and Texas would be icing on the cake.

            --
            People today are educated enough to repeat what they are taught but not to question what they are taught.
            • (Score: 2) by Phoenix666 on Tuesday October 24 2017, @02:07PM (4 children)

              by Phoenix666 (552) on Tuesday October 24 2017, @02:07PM (#586854) Journal

              Cutting off the oil wealth of the nutjobs in the Middle East and Texas would be icing on the cake.

              I started saying the same thing when the Gulf War was heating up. The best way to pull the plug on militant Islam is to stop sending them $365 billion every year for their oil. Shit would get real for the sheiks there, then, real fast.

              Wish more people drew the same conclusion we have.

              --
              Washington DC delenda est.
              • (Score: 2) by DannyB on Tuesday October 24 2017, @02:16PM (3 children)

                by DannyB (5839) Subscriber Badge on Tuesday October 24 2017, @02:16PM (#586862) Journal

                Yes, I realized the same thing about the same time. Gulf War I. Geopolitics would change radically once that oil money dries up. But if Texas lost the ability to dictate classroom textbooks for everyone else, the godless heathens might learn science and history. It could put a dent in Fox News.

                In the sequel Gulf War II -- The Quest To Finish Daddy's War, the plot had less emphasis on oil. And the characters were less likable. The dialog was not as well written.

                --
                People today are educated enough to repeat what they are taught but not to question what they are taught.
                • (Score: 2) by Phoenix666 on Tuesday October 24 2017, @02:54PM (2 children)

                  by Phoenix666 (552) on Tuesday October 24 2017, @02:54PM (#586884) Journal

                  In the sequel Gulf War II -- The Quest To Finish Daddy's War, the plot had less emphasis on oil. And the characters were less likable. The dialog was not as well written.

                  Yes, but they did cast Alf [data] as the President of the World Bank [data], so that was a gem in that clunker of a movie. The hair-licking scene [youtube.com] had the best 'ick' factor of any film in the 00's.

                  --
                  Washington DC delenda est.
                  • (Score: 2) by bob_super on Tuesday October 24 2017, @04:15PM (1 child)

                    by bob_super (1357) on Tuesday October 24 2017, @04:15PM (#586916)

                    I thought the biggest ick factor was shoehorning a happy ending at the end of Act 1, happy aircraft carrier and all, and forgetting to write an actual ending to the story, leaving all the mooks behind to get shot...
                    But you're correct, it's probably more a projective-vomit moment than an "ick"

                    • (Score: 2) by Phoenix666 on Tuesday October 24 2017, @06:39PM

                      by Phoenix666 (552) on Tuesday October 24 2017, @06:39PM (#586991) Journal

                      I'd classify the aircraft carrier moment as "FFS," but that's OK we can both be right.

                      --
                      Washington DC delenda est.
    • (Score: 4, Informative) by c0lo on Monday October 23 2017, @09:31PM (1 child)

      by c0lo (156) Subscriber Badge on Monday October 23 2017, @09:31PM (#586590) Journal

      Tesla has decided it is okay to turn over all its technology to China.

      What technology you think does Tesla has that China don't have it already?

      BYD [wikipedia.org]

      Hailed for its innovations,[4] BYD has grown to become a major manufacturer of rechargeable batteries, most notably mobile phone batteries.[5]

      BYD topped the 2010 Bloomberg Businessweek Tech 100 list, a list of large, fast-growing tech companies.[6]

      Comparison [afr.com]:

      While Musk and much of the American media breathlessly noted the opening of Tesla's "Gigafactory" in January, that same milestone (1 gigawatt of annual battery production) was reached by BYD at least three years ago.

      --
      https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
      • (Score: 2) by bob_super on Tuesday October 24 2017, @04:19PM

        by bob_super (1357) on Tuesday October 24 2017, @04:19PM (#586918)

        But they're not American, so they don't count and are probably just copycats!

  • (Score: 4, Insightful) by AssCork on Monday October 23 2017, @05:49PM (9 children)

    by AssCork (6255) on Monday October 23 2017, @05:49PM (#586448) Journal

    The Chinese will have their own plant cranking out cloned Teslas at a third of the cost, and a tenth of the QA.
    A shame, Mr Musk really seemed like the exact opposite of an evil genius - what with his all-electric cars, solar panel roof tiles, and what-nots.
    Who would have guessed the chink in his armour was the inability to learn from other [jalopnik.com] people's [nbcnews.com] experiences [forbes.com]?

    --
    Just popped-out of a tight spot. Came out mostly clean, too.
    • (Score: 4, Insightful) by Anonymous Coward on Monday October 23 2017, @06:14PM (3 children)

      by Anonymous Coward on Monday October 23 2017, @06:14PM (#586467)

      Your cork fell out.

      This is actually the opposite of an evil move, he is voluntarily setting up manufacturing because it will earn money for Tesla guaranteed and if the Chinese steal any of Tesla's methods it will only improve electric car tech worldwide. This was Musk's not-evil motives as far as I can tell, get the world away from fossil fuels and on to more sustainable tech. Getting China on a faster track to EV adoption is good for the whole world.

      Typical capitalist viewpoint though, "wah wah our prooofits!" US industrialization was kicked off by some intellectual property theft, now the rest of the world follows suit. Perhaps it is time we viewed technological advancement as a more open field instead of something to be hoarded so private corporations can fuck over the general public?

    • (Score: 2) by Arik on Monday October 23 2017, @08:23PM (3 children)

      by Arik (4543) on Monday October 23 2017, @08:23PM (#586551) Journal
      "A shame, Mr Musk really seemed like the exact opposite of an evil genius - what with his all-electric cars, solar panel roof tiles, and what-nots."

      It appears your genius detector and your bullshit detector got cross-wired somehow.
      --
      If laughter is the best medicine, who are the best doctors?
      • (Score: 4, Insightful) by MrGuy on Monday October 23 2017, @11:15PM (2 children)

        by MrGuy (1007) on Monday October 23 2017, @11:15PM (#586640)

        Plug-in electric cars were a range-limited, tiny, underpowered toy industry until the Tesla.
        Rooftop solar was relatively limited use in the many states where it's illegal to sell excess power to the grid until the Powerwall made it possible to save your own electricity.
        Integrated solar tiles that actually look nice on a house were a pipe dream until Solar City made them potentially workable.
        Private space launch was limited to Virgin Galactic's "within 10 years, maybe we can make space tourism less than $250,000!" idea before SpaceX got off the ground.
        Building reusable rocket parts that could be practically landed and reused was impossible until SpaceX did it.

        Where's the bullshit, exactly?

        Elon Musk didn't invent any of these industries, but he's advanced the state of the art substantially in multiple industries. He's definitely not perfect, but if you refuse to acknowledge that there's more than a bit of genius required to achieve what he has, then IMO you have an awfully high bar for what you consider a genius.

        • (Score: 3, Insightful) by Arik on Monday October 23 2017, @11:53PM

          by Arik (4543) on Monday October 23 2017, @11:53PM (#586654) Journal
          "Plug-in electric cars were a range-limited, tiny, underpowered toy industry until the Tesla."

          Pouring money into an emerging industry just as it nears viability is a perfectly good business tactic, but it's hardly 'genius.'

          "Rooftop solar was relatively limited use in the many states where it's illegal to sell excess power to the grid until the Powerwall made it possible to save your own electricity."

          Is it actually illegal to sell your power back to the grid anywhere? I'd want to see a citation on that, frankly I doubt it very much. What's driven rooftop PV adoption has been net metering laws that effectively force the utility to subsidize them.

          And again, getting in on a big subsidy or wealth transfer at just the right time may be keen business sense but 'genius' is a bit much.

          "Integrated solar tiles that actually look nice on a house were a pipe dream until Solar City made them potentially workable."

          And I'll anticipate your second paragraph right here. 'Potentially workable.' There's a big difference between 'potentially workable' and effectively practical, an enormous gulf, and he seems to have a real knack for convincing investors it's a trifle, if it's acknowledged even that much. This is a project that isn't going to solve any real world problems, if we take it on its face it's about giving fabulously wealthy people a socially acceptable way to flaunt that wealth; and the only other way it makes much sense is simply as a ruse to part investors from their money.

          "Elon Musk didn't invent any of these industries, but he's advanced the state of the art substantially in multiple industries."

          Sure, I'll actually give you that, with the clarification he's done so simply by investing heavily in already existing techs at the right time.

          "He's definitely not perfect, but if you refuse to acknowledge that there's more than a bit of genius required to achieve what he has, then IMO you have an awfully high bar for what you consider a genius. "

          I don't believe that it takes a genius to make a canny businessman, or a good confidence man either; in fact I rather suspect a correlation in the opposing direction.

          --
          If laughter is the best medicine, who are the best doctors?
        • (Score: 2) by Aiwendil on Tuesday October 24 2017, @03:49PM

          by Aiwendil (531) on Tuesday October 24 2017, @03:49PM (#586901) Journal

          Rooftop solar was relatively limited use in the many states where it's illegal to sell excess power to the grid until the Powerwall made it possible to save your own electricity.

          I'll bite.
          Just why is iy impossible to store the excess power in deep cycle ("marine") batteries in those states? I mean, that is the goto-solution for it at small scale (a couple of dozen kWh) in pretty much the entire world.

          Quite frankly most (not all, but most) of the musk-inventions are just repackaging and corner-cutting (lots of his stuff are just repackaged standard industrial solutions scaled back to consumer requirements)

    • (Score: 2) by c0lo on Monday October 23 2017, @10:08PM

      by c0lo (156) Subscriber Badge on Monday October 23 2017, @10:08PM (#586609) Journal

      Search for "BYD 1GWh before Tesla", you'll discover it already got it 3years ago.

      --
      https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
  • (Score: 2) by stretch611 on Monday October 23 2017, @07:40PM (2 children)

    by stretch611 (6199) on Monday October 23 2017, @07:40PM (#586511)

    I wonder if this is related to the recent mass firings due to "performance" issues at tesla.

    https://www.cnbc.com/2017/10/17/tesla-firings-former-and-current-employees-allege-layoffs.html [cnbc.com]

    OFC, Tesla will never admit that they are related.

    --
    Now with 5 covid vaccine shots/boosters altering my DNA :P
    • (Score: 2) by takyon on Monday October 23 2017, @08:32PM

      by takyon (881) <reversethis-{gro ... s} {ta} {noykat}> on Monday October 23 2017, @08:32PM (#586556) Journal

      It isn't.

      This is a factory in China to produce cars TO BE SOLD IN CHINA, which is now the world's largest auto market.

      --
      [SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
    • (Score: 2) by e_armadillo on Monday October 23 2017, @10:34PM

      by e_armadillo (3695) on Monday October 23 2017, @10:34PM (#586619)

      I would bet the firings were more likely dealing with the union agitator problem . . . that or something about a moose

      --
      "How are we gonna get out of here?" ... "We'll dig our way out!" ... "No, no, dig UP stupid!"
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