Automaker and alternative energy giant Tesla has signed off a deal to build a manufacturing facility in Shanghai, this deal is said to be the ‘first of its kind’ allowing a foreign automaker to own a plant in the city’s free-trade zone.
The most common opinion of why they have been allowed to set up camp in the free-trade zone is that the Chinese authorities ordered accelerated mass production of electric vehicles. They claim they will sell some 700,000 electric cars in 2017. The WSJ reported authorities have set a target of 7 million electric vehicle sales by 2025.
One of the big questions surrounding tesla is “Is it a Tech company or a Car company?” The idea that Tesla is a technology company gained credibility in 2013, when its stock price shot up by 382.5% within a single year. Publications scrambled to find similarities between companies from the technology sector, which had similar growth rates, and Tesla. This also made peoples minds run wild with the idea that Tesla technology could be used outside of the car industry, and could perhaps be a matter of time before Tesla branches out to new devices in the technology world such as Smartphones and PC’s, at the end of the day that’s where the real money is.
However, much depends on execution. Over the years, several electric car companies with promising technologies have fallen despite favourable incentives and massive funding. So far, Tesla has avoided that fate despite a plethora of past and present problems. So are we seeing a new up and coming technology developing company that will threaten the likes of Apple’s software, or just a successful electric car company?