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Tesla’s next Gigafactory could be in China, according to a report from Bloomberg. The electric car maker is in talks to build its vehicles in the country for the first time, and it’s nearing an agreement with the city of Shanghai to construct the manufacturing facility in a nearby industrial development zone.

The final details of the agreement are still in flux, and Bloomberg says timing about when it’ll be made official could still change. Tesla will also need to partner up with a local automaker to create a joint venture in the company, as other automakers entering local production from overseas have done, in keeping with local requirements.

A local presence could be a huge boon for Tesla, which is seeing big growth in its business in the country. Currently, Model S and Model X vehicles bought in the country face a 25 percent import tax, and as Tesla expands its business to more affordable market segments, sidestepping that tax with local assembly facilities will be key.

China also has aggressive targets and incentives for vehicle electrification, which could help Tesla with its larger global goals. Back in March, Tesla also received investment from Tencent, which acquired a five percent stake in the energy co. for $1.8 billion – that could help it pave the way for  heightened local footprint, too.

Elon Musk has said that Tesla is looking at new global locations for Gigafactories, and could announce as many as four new spots for the gigantic manufacturing facilities within the next year.

Featured Image: David Butow/Corbis/Getty Images



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