Tesla has signed an agreement with Shanghai authorities for an 860,000 square meter plot of land as it seeks to build its first assembly plant outside the United States.
The land agreement for the mega-factory marks a key step for the US electric carmaker to produce vehicles locally in China for the fast-growing market, Reuters reports.
“Securing this site in Shanghai, Tesla’s first Gigafactory outside of the United States, is an important milestone for what will be our next advanced, sustainably developed manufacturing site,” Robin Ren, Tesla’s vice president of worldwide sales, was quoted as saying in a statement.
Tesla did not give the price tag for the plot, but the Shanghai Bureau of Planning and Land Resources said on Wednesday that a plot of land of 864,885 square meters had been sold at auction at a price of 973 million yuan (US$140.5 million).
In July, Tesla signed a deal with the Shanghai government to open a plant in the city with an annual capacity of 500,000 cars.
The factory will help tap China’s rapidly growing market for so-called new-energy vehicles, a category comprising electric battery cars and plug-in electric hybrid vehicles.
Tesla, which started hiring for the new Shanghai factory in August, previously said that it would raise capital from Asian debt markets to fund the construction, which will cost around US$2 billion.
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