Shanghai Jinqiao Denies Signing Agreement With Tesla to Build Production Plant
Yicai Global
/SOURCE : Yicai
Shanghai Jinqiao Denies Signing Agreement With Tesla to Build Production Plant

(Yicai Global) June 22 -- Shanghai Jinqiao (Group) Limited Co., a state-owned company that operates and develops commercial and residential properties, has denied signing a memorandum of understanding with electric carmaker Tesla Motors Inc. to build joint-venture production facilities in Shanghai.

This was in response to a report issued by Bloomberg News on June 20 stating that Shanghai Jinqiao had signed a non-binding MOU with Tesla to build an automobile manufacturing plant. Each side might contribute around CNY30 billion (USD4.56 billion) to the project, the report said, citing a source close to the matter.

This news saw the stock price of Tesla rise by two percent on Monday, the largest increase since June 7, and Shanghai Jinqiao's shares surged to the daily trading limit of 10 percent soon after the market opened yesterday.

Thanks to strong government support, China's new energy automobile market has grown to be the world's largest in just two years. Last year, 330,000 plug-in vehicles were sold in China, of which 188,000 were passenger cars, accounting for 35 percent of the world's total, according to statistics from electrical vehicle website

Tesla was successful when first introduced to the Chinese market, but its prices cannot compete with domestic competitors benefiting from government subsidies.

Tesla CEO Elon Musk noted that prices of its cars could be reduced by one third if a manufacturing base was set up in China, according to a report published in the Wall Street Journal last year.

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