Tesla to build factory in Shanghai as auto makers push for new arrangements in China

Car makers including Tesla Inc. are stepping up in China amid trade-war concerns.

Following months of speculation, Tesla TSLA, +0.76% is now prepared to open a plant in China, the Shanghai city government announced Tuesday. Chief Executive Elon Musk appeared in China to commemorate the partnership and sign an agreement.

According to Tesla, the factory will take about two years to build, and it won’t reach its stated capacity of 500,000 vehicles a year for another two or three years. Still, the arrangement is notable, as Tesla will become the first foreign auto maker to open a wholly-owned factory in China and forego a joint-venture arrangement.

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