Tesla Eyes Shanghai as Front-Runner for China Production

[cirr]

Our American friends simply can't refrain themselves from investing in China

Tesla Eyes Shanghai as Front-Runner for China Production

Bloomberg News

June 20, 2016 — 1:48 PM EDT

Updated on June 20, 2016 — 9:47 PM EDT

Shanghai has emerged as the front-runner to become the production base for Tesla Motors Inc. in China in an investment that may be valued at about $9 billion, according to a person with knowledge of the matter.

Jinqiao Group, a Shanghai government-owned company, has signed a non-binding memorandum of understanding with Tesla on building its production facilities in the municipality, said the person, who asked not to be identified because the negotiations are private. Each party may invest about 30 billion yuan ($4.5 billion) in the partnership, with Jinqiao putting up land for most of its share, the person said.

Besides Shanghai, Suzhou and Hefei are among the cities that are actively seeking to win the investment from Tesla, the person said. At $9 billion, the investment would be larger than Walt Disney Co.’s $5.5 billion Shanghai theme park, which opened this month to fireworks and messages of support from Presidents Xi Jinping and Barack Obama.

Shanghai Jinqiao Export Processing Zone Development Co., a real-estate developer in the Jinqiao area, surged by the daily 10 percent limit in Shanghai trading as of 9:34 a.m. Tesla’s shares closed 2 percent at $219.70 on Monday in U.S. trading.

‘Major Win’

“This would be a major win for Tesla and Shanghai,” said Steve Man, an auto analyst at Bloomberg Intelligence. “The investment will probably include a nationwide dealership network, superchargers, R&D center and potentially a second ‘Gigafactory.”’

Manufacturing in China would allow Palo Alto, California-based Tesla to avoid a 25 percent import levy, making its electric vehicles more competitive against luxury-brand rivals, such as BMW and Audi, as well as local offerings by BYD Co. and BAIC Motor Corp. Besides its role as a financial center and sea port, Shanghai is also one of the major auto manufacturing hubs in China and home to SAIC Motor Corp., which has joint ventures with General Motors Co. and Volkswagen AG.

Foreign automakers that want to set up manufacturing plants in China have to do so through joint ventures in which they can own up to a 50 percent stake. Different provinces and cities compete for the investments, which create jobs and spurs the local economy. Ford Motor Co. has partnered with Changan Group in the southwestern municipality of Chongqing, Hyundai Motor Co. is working with BAIC Group in Beijing, while Nissan Motor Co.’s China venture is based in Wuhan in central Hubei province.

Khobi Brooklyn, a Tesla spokeswoman, said the company wouldn’t comment on “rumor and speculation.” Calls to Jinqiao Group weren’t answered, while the Shanghai Jinqiao Economic and Technological Development Zone, a government body overseeing the area, didn’t respond to a faxed request for comment. A spokeswoman for the Shanghai municipal government didn’t confirm or deny the negotiations, saying checks with related parties didn’t yield much clarity.

— With assistance by Tian Ying, and Steven Yang

http://www.bloomberg.com/news/artic...-front-runner-for-tesla-china-production-site

 

[cirr]

2nd time lucky for Walmart? With the help of JD this time??

Walmart Signs $1.5 Billion Deal With JD.Com In Latest China Effort

By Phil Wahba

June 20, 2016, 5:34 PM EDT

Wal-Mart Stores wmt is taking a new tack in its efforts to become a much bigger player in China.

The world’s largest retailer said on Monday it would sell its Chinese online e-commerce marketplace, Yihaodian, to JD.com, the country’s No. 2 e-commerce player in an all-share deal. In exchange, JD.com will issue Wal-Mart stock amounting to about 5% of its total shares, worth roughly $1.5 billion based on JD.com’s recent share price.

There are only about 430 Walmart stores in China, a tiny presence compared to its 4,000+plus U.S. stores, and the deal with JD.com, second only to Alibaba baba in China, is a way to kick start its growth in a promising market.

Wal-Mart and JD.com will work together on the direct-to-retail part of Yihaodian’s business. The companies said Wal-Mart could win a lot of traffic from JD.com’s large base of online shoppers and same-day delivery infrastructure. And Sam’s Club will open a store on JD.com, among other areas of collaboration.

“We’re excited about teaming up with such a strong leader in JD.com, and the potential that this new relationship creates for customers in China,” Wal-Mart CEO Doug McMillon said in a statement. Earlier in his career, McMillon was CEO of Walmart International, giving him responsibility for the retailer’s China strategy.

JD.com has been eating away at Alibaba’s market share, according to the Wall Street Journal, which cited data from consulting firm iResearch.

As for Wal-Mart, the U.S. retailer has hit some speed-bumps in building its business in China, where it opened its first store 20 years ago. China is now Wal-Mart’s fourth biggest international market by sales, though last month executives said there are significant challenges in that market and that its e-commerce performance in China and other markets had been a drag on the company’s overall online growth. In the first quarter, Wal-Mart’s global e-commerce rose a modest 7%.

http://fortune.com/2016/06/20/walmart-china/

 

[chauism]

Nothing is signed, every party is China in just in talk with Tesla. Nothing will be signed either in the near future if Tesla itself do not solve how to supply all those already ordered Tesla car battery, because for now Panasonic Tesla batteries production can bearly keep up with the demand.

 

[CountStrike]

Shanghai Jinqiao denies factory deal with Tesla
0
2016-06-22 08:47Global TimesEditor: Li Yan
City offers robust supplier network, deep talent base: analyst

Shanghai Jinqiao Export Processing Zone Development Co on Tuesday denied that its controlling shareholder had signed any agreements with U.S. premium electric-car maker Tesla Motors Inc concerning the latter's local production, according to a filing on the Shanghai Stock Exchange.

Earlier on Tuesday, Bloomberg reported that Jinqiao Group, the controlling shareholder, had signed a nonbinding memorandum of understanding with Tesla on building production facilities in Shanghai.

According to the report, each party will invest about 30 billion yuan ($4.57 billion) in the partnership,?with Jinqiao putting up land for most of its share.

Following the news, shares in Shanghai Jinqiao Export Processing Zone Development- Co surged 9.98 percent in morning trading on Tuesday. Trading was suspended in the afternoon session.

Media reports in January said that Elon Musk, founder and CEO of Tesla, was considering the construction of a production base in China. Later media reports showed that Suzhou in East China's Jiangsu Province and Hefei, capital of East China's Anhui Province, had wooed Tesla, but neither of the locations was confirmed by Tesla.

Tesla did not comment when asked by the Global Times on Tuesday whether it would build a production facility in Shanghai.

Tesla has previously cooperated with Jinqiao. In April 2014, Tesla opened a supercharger station in the Shanghai Jinqiao Economic and Technological Development Zone, which is operated by Jinqiao Group, and a Tesla experience center is also located in the zone.

Zhang Yu, managing director at consultancy Automotive Foresight (Shanghai) Co, said that Shanghai would be an attractive location for Tesla's local production, given the area has a very mature auto supplier network and a rich industry talent pool.

Shanghai is home to SAIC Motor Corp, which has joint ventures with General Motors Co and Volkswagen AG.

Though Tesla is pinning high hopes on China, its performance in the market hasn't met expectations. In 2015, revenues from China totaled $319 million, down 33 percent on a yearly basis, according to its annual report in February.

Local production could help boost sales by significantly lowering costs, analysts said. Importing vehicles means paying shipping fees, and the cars are then subject to a 25 percent duty.

A basic Model S is priced at about 680,000 yuan ($103,360) in China, compared with some $72,700 in the U.S., according to price information online.

The Chinese government has been encouraging sales of new-energy vehicles (NEV) throughout the country, and NEV buyers enjoy subsidies or favorable policies in getting a car plate in some locations.

Analysts also said that it is better for Tesla to start local production sooner rather than later as the market is evolving fast.

"It could take years for Tesla to finally start production in China, but it may face fiercer competition by then, as both Internet companies and traditional carmakers have their eyes on the electric vehicle market," Shanghai-based independent analyst Wu Shuocheng told the Global Times Tuesday.

For instance, Internet company Letv Holdings Co has announced plans to produce electric cars, eyeing Tesla as a rival. Harmony Futeng, a start-up backed by Internet giant Tencent Holdings, is also eyeing electric cars.
http://www.ecns.cn/business/2016/06-22/215173.shtml