TESLA HIKES PRICES IN CHINA AFTER TARIFFS HIT US CARS

Tesla has reached a preliminary agreement with the Shanghai government to build a factory that’ll rival production from its lone US assembly plant, as Elon Musk takes his biggest step yet to expand overseas.

The electric-car maker’s planned capacity for the factory is 500,000 vehicles a year, the Shanghai government said in statement. Bloomberg reported earlier that Musk, Tesla’s chief executive officer, would be in the city for an event with the government on Tuesday. A Tesla representative in China didn’t immediately respond to a request for comment.

While Tesla has been working on setting up production in China for more than a year, President Donald Trump has been trying to bolster manufacturing in the US Tesla follows Harley-Davidson in expanding outside the US, underscoring the urgency with which companies are moving to avoid damage from escalating trade disputes.

Tesla shares extended their advance before the start of regular trading to gain as much as 3.4 per cent.The youngest publicly held US automaker is looking to expand its capacity and to more efficiently reach global markets. Tesla’s lone car-assembly plant is in Fremont, California, with a giant battery factory in neighboring Nevada. After moving ahead in China, the world’s largest market for electric vehicles, Tesla has said it will reveal plans toward the end of 2018 to build a plant in Europe.

While Musk, 47, said in May 2016 that he expected Tesla would produce 500,000 vehicles a year by 2018, the company has repeatedly fallen short of his manufacturing goals with the Model 3 sedan. Tesla has built about 88,000 cars through the first half of this year.