|It could be crucial to selling cars in a hot market.|
Tesla has so far declined to comment besides restating what it said in June, where it vowed to "clearly define" its manufacturing plans in China before the end of 2017. The company had confirmed that it was talking to Shanghai's government about a factory at the same time.
If the deal is in place, it could be the ticket to igniting Tesla's Chinese sales -- and the company as a whole. While the automaker has sold its EVs in China for years, sales have sometimes struggled in a country where it faces an uphill battle between its outsider status and apartment-focused living (you can't buy an EV if there's nowhere to charge it). A Shanghai factory would not only make Tesla's vehicles more palatable, but could help it satisfy demand now that the Chinese EV market is truly heating up. And this is especially important for the Model 3. It's the cornerstone of Tesla's expansion into the (relative) mainstream, and anything it can do to both lower costs and improve availability should make a significant impact on sales.