Tesla looks for Chinese production partner

Shai Oster
Bloomberg News

Tesla Motors Inc. is seeking a Chinese production partner for its electric cars as co-founder Elon Musk predicts a bright future for autonomously driven vehicles.

China’s market has enormous potential given concerns about pollution and the environment, Musk said in Hong Kong on Tuesday. The billionaire has held “a number of high level meetings” with the government, he said without elaborating.

Tesla posted its strongest quarterly sales in China for the three months ended September, as it prepares to begin sales of its Model X SUV this year. Securing a local partner would help Tesla circumvent import tariffs of at least 25 percent, while abiding by regulations that set a ceiling on foreign ownership of auto-making ventures at 50 percent.

While Musk cautioned that falling oil prices could dampen interest in electric-powered vehicles, worsening pollution could prove a boon to makers of cleaner vehicles that are exempt from restrictions such as license plate quotas in Beijing. Among his predictions for the future are a Tesla truck, a manned flight to the International Space Station by his SpaceX venture before the end of 2017 and a majority of new cars to be driverless within 15 years.

Driving a car will be “like owning a horse. You do it for sentimental reasons, not transport,” Musk said. Home Charge Tesla is working with the government of Hong Kong, which has the highest per capita number of Teslas, on rolling out home power charging stations. That could provide a model for other cities to follow.

Tesla is one of several companies, including Alphabet Inc., Baidu Inc., General Motors Co. and Ford Motor Co., working on autonomous or self-driving technology.

While Musk is looking to China, Chinese Internet billionaire Jia Yueting is aiming to break ground on a $1 billion production plant in Nevada for his electric car company, Faraday Future, which unveiled a prototype 1,000-horsepower super car in Las Vegas earlier this month.