Tesla Shanghai Co., Ltd. was approved to establish ,a number of companies selected for the industrial chain

Tesla(Shanghai) Co. was approved a week after Tesla CEO Musk told a earnings meeting that Tesla would build a super plant in China.

On the afternoon of May 14, the Securities Times reporter learned from the National enterprise credit information publicity system that Tesla(Shanghai) Co., Ltd.(Tesla Shanghai) had obtained the business license issued by the Shanghai Pudong New Area Market Supervision Bureau on May 10. The newly established company has a registered capital of 100 million yuan and the shareholder is TESLAMOTORSHKLIMITED(Tesla Automobile Hong Kong Co., Ltd.), with a 100 % investment ratio.

The information also shows that Tesla China President Zhuxiaotong is the newly established Tesla Shanghai legal representative, chairman and general manager. Tesla's main personnel in Shanghai also include Zhang Jing and Tuode·andelu·malong(Tod AndrewMaron), two directors, and a supervisor, Make·jiexi(David Cedar).

The second Super factory?

The establishment of Tesla Shanghai has inevitably reminded the outside world of Musk's statement at the May 3 quarterly financial report phone conference.

Mr Musk said the second super plant would be announced by the fourth quarter of this year and plans to announce the location of a super plant in China. He also revealed that future super factories will also take into account car manufacturing.

In fact, Mr Musk sketched the idea of a factory in China last November and plans to start production by 2020, producing hundreds of thousands of cars a year.

In the eyes of industry insiders, the point of setting up a super battery factory for Tesla is to increase the production of lithium batteries and reduce production costs. Tesla is expected to cut costs by 20 per cent after it builds its plant in China, which will directly reduce the terminal price of its products and will have a greater incentive to its sales in the Chinese market.

According to business information, the newly established Tesla Shanghai business scope mainly includes: technology development, technical services, technical advice, and technology transfer in the field of electric vehicles and parts, batteries, energy storage equipment, and photo voltaic products. Wholesale, commission agency(except auction) and import and export business of the same kind of goods mentioned above, and provide related supporting services, electric vehicle display and product promotion.

On the evening of May 14, a reporter from the Securities Times asked Tesla about the relationship between the "China Construction Factory" mentioned by Musk and Tesla Shanghai. The relevant person in charge of Tesla China asked for confirmation. As of the date of the release of the reporter, no reply was received.

According to the Securities Times reporter, the joint venture policy has always been the biggest obstacle to Tesla's entry into China. Since 1994, China has implemented the policy of establishing joint ventures between foreign car companies and Chinese car companies, and foreign car companies must not hold more than 50 % of their shares.

In April, China's national development and reform Commission announced a timetable for easing the quota for foreign shares in the auto industry, with foreign shares in new energy vehicles set to be lifted this year. The auto industry insiders surveyed believe that the release of the car joint stock ratio means that Tesla is possible to build a factory solely in China. Tesla's supply chain system is more open than traditional car manufacturers. At present, more companies have entered Tesla's supply chain system. If Tesla's domestic factory construction falls to ground, it will further promote the domestic transfer of the Tesla supply chain.

Several companies selected for the industry chain

But Tesla, which is still losing money and refuses to raise capital, faces funding challenges to build a new super plant in China. It is understood that the first Tesla super plant is located in Nevada, USA. Tesla has invested a total of 5 billion U.S. dollars in construction costs. In addition to Tesla, Panasonic, the world's main supplier of lithium batteries, is also the main investor in the factory.

Tesla released its first quarter results in 2018 on May 3. Tesla's first-quarter revenue was $3,409 million, up from $2,696 million in the same period last year; The net loss was $785 million, double the $372 million net loss for the same period last year and the highest on record. In the earnings call, when asked if Tesla needed funding, Musk responded, "No, I don't want to. He believes that Tesla Model 3 has passed the production bottleneck and will achieve high profitability in the third and fourth quarters. Tesla's economic crisis will be resolved.

Many domestic and foreign institutions are optimistic about Tesla's future prospects for building factories in China. Fenxishiyalishanda·bote, a Wall Street firm, said China was expected to become Tesla's largest market in the future. In 2017, Tesla sold 14,883 electric vehicles in China, accounting for 3 % of the total, with revenues from the Chinese market accounting for about 17 % of Tesla's total revenue, according to data.

In a recent research paper, Huachang Securities believed that Tesla needs China as the world's largest new energy car market, and the Chinese new energy car industry also needs Tesla. In addition to products that are more easily accepted by domestic consumers, Tesla's huge supply chain purchases may increasingly migrate to China due to the establishment of production plants in China, such as the growing proportion of Apple's industrial chain in China. At present, in addition to the traditional auto parts industry chain is very sound, we have established the industrial cluster of three major new energy vehicles(battery motor electric control) that are competitive in the global market. Domestic power batteries and battery materials link a number of companies in the market competition has proved that it has a world-class competitiveness.

From the current situation, Tesla's body parts supplier sources are mainly related companies in North America, Japan, and Taiwan, China. In battery systems, spare parts systems, lithium electric equipment, etc.. A-share listed companies such as Xusheng shares(603305), Hongte Precision(300176), Tianqi model(002510), Haida shares(300320), and Weitang Industrial(300707) and other domestic parts suppliers also entered the Tesla industrial chain.

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