Tesla Sharing Technology With China Is ‘Subject to Negotiation’

(Bloomberg) -- Any sharing of technology by Tesla Inc. with a Chinese partner as part of its expansion in the world’s largest electric-car market is a matter that’s “subject to negotiation,” a Shanghai government official said.

“For technology transfer, it is a matter subject to negotiation between the enterprises,” Huang Ou, deputy head of the Shanghai government’s economy and information technology commission, said Wednesday at a briefing in the city. Ou was responding to a question on whether Tesla would transfer its technology to China after signing a preliminary agreement with the Shanghai government to build a plant in the city.

Asked about the total investment required, Huang said the plant would be the largest ever foreign-invested manufacturing project in Shanghai. Tesla will likely need to spend at least $10 billion for the initial phase, including a “gigafactory” battery facility, Bloomberg Intelligence said in a report Wednesday.

The Chinese government has identified electric vehicles as one of the industries it wants to dominate in this century. Chinese firms are encouraged to borrow ideas from their foreign partners seeking to expand in the nation. About one in five U.S. companies in China have been asked to transfer technology, according to a survey last year.

Construction of what will be Tesla’s second car-assembly plant in the world will begin soon after approvals and permits are secured, and the first vehicles will roll off the line within about two years, Tesla said Tuesday. It will take a further two to three years for the factory to reach its capacity to build about 500,000 vehicles annually.

Shanghai’s government will help Tesla complete the plant as soon as possible, Huang said at the briefing about measures to further open up the local economy to international businesses and investors.

Under the pact, Tesla and the city will focus their cooperation on promoting technology innovation, the local government said in a press release. Tesla will build an electric-vehicle development and innovation center in Shanghai, which will be an important part of the company’s global research and development system, according to the press release.

To contact Bloomberg News staff for this story: Charlie Zhu in Shanghai at qzhu46@bloomberg.net

To contact the editors responsible for this story: Ville Heiskanen at vheiskanen@bloomberg.net, Lena Lee

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