Tesla Motors Inc (NASDAQ:TSLA) is planning to expand its presence in China’s electric vehicle industry and it plans to do this by launching a factory in the country.

China has a lot of interest in electric vehicles and there are a few companies who offer their models to the market. The Chinese government also has high regard for EV because it offers an alternative that can help address China’s serious pollution problem. Representatives from Tesla recently visited the large Chinese city of Suzhou which is situated about 60 miles from Shanghai. The objective of their visit was to hold talks with the local government over the construction of a new factory near the town.

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The company has not revealed the details of the meeting and has remained relatively silent about the matter. One of Tesla’s spokespersons was approached by Global Times about the matter but declined to reveal any details. The firm’s chief executive officer Elon Musk had previously mentioned plans to launch a production plant in China.

Having a factory in Suzhou could be beneficial to both Tesla and the country. Tesla would boost its production in China where it would offer all-electric vehicle models to the market with more ease. Production of the Tesla Model 3 in China would also allow the firm to satisfy the demand for the more affordable option. It would also help the firm to avoid the hefty tax imposed on vehicle imports. Production in China will most likely be for the local market meaning vehicles produced by the planned factory will probably only be sold in China.

Despite the advantageous nature of setting up production in China, it will be a daunting task. The company has to identify a suitable piece of land on which the factory will be built. The firm also has to find a local manufacturer to partner with. So far Tesla has not revealed any details on how it plans to address some of the requirements.