Tesla Motors has reportedly put on hold any plans to produce models in China in the immediate future. The company's chief technical officer, JB Straubel, said that the electric vehicle (EV) manufacturer would only consider a production base in China when demand growth for its new models was adequate, according to local media. The China Daily reports that Straubel said that Tesla will only consider a base in China when local demand reached "critical mass". Meanwhile, the Beijing Times reports that sources claim that Tesla has suspended plans to build a base in China as the automaker has not been able to find a "suitable partner for co-operation".
Significance: Current policies governing production of vehicles in China stipulate that an international automaker must have a joint venture (JV) with a Chinese automaker to produce vehicles in the country, with the international partner owning no more than 50% of the venture. Tesla has so far been reluctant to consider a JV for the production of its models in China. However, earlier this year the company's founder, Elon Musk, was quoted as saying that he expected to find a local JV partner in China by the "middle of this year" . Therefore, it appears that no partner has been found and so Tesla is shelving its plans for local production in China.
