Tesla plans to open what appears to be an R&D center in Beijing, suggesting the company will do more engineering from inside China.
As first reported by China Automotive News, an entity named “Tesla (Beijing) New Energy R&D Co. Ltd.” has surfaced in China’s National Enterprise Credit Information Publicity System, a searchable index of registered companies. According to the entry, it will be involved in the research and development of electric cars, parts, batteries, and equipment. It has registered capital of $2 million dollars. Zhu Xiaotong, who has led Tesla’s China division since 2014, is listed as its legal representative. Tesla did not answer Quartz’s request for comment on the entity name inclusion on the registry.
At present, Tesla’s activity in China mostly has been limited to selling imported vehicles to Chinese consumers. It has been somewhat successful. The company reportedly tripled its sales in China to 10,400 between 2015 and 2016, according to estimates from JL Warren Capital. Company filings show it generated $1.1 billion in revenue from China throughout 2016, about one-seventh of its global total. Its charging stations in Beijing and Shanghai are now the world’s largest Tesla Supercharging spots.
Yet in China Tesla is merely one among many other electric car brands, occupying 8.6% of China’s EV market, according to Bloomberg. Most electric vehicles sold in the country are from domestic brands like BYD, Geely, and the state-affiliated BAIC.
One likely reason for Tesla’s lack of popularity is its price tag—its vehicles are subject to a steep import tax because they are not produced domestically with a local partner, as Chinese law requires.
This year signs have emerged that the company is looking to do more than just sell cars in China. Most notably, the company reportedly secured a deal to manufacture vehicles in Shanghai’s Free Trade Zone, though that may not do much to remove the taxes placed on its cars. It also has begun hiring aggressively on Chinese campuses. Becoming a maker in China could help it become an even better seller.