Tesla is three years away from making cars in China, Musk says


Don’t count on Tesla Inc. to make electric vehicles in China before the end of this decade.

The company is about three years away from starting production in the world’s largest auto market, Chief Executive Officer Elon Musk told analysts during an earnings call Wednesday. The plant will make a couple hundred thousand vehicles a year for buyers in China and potentially other parts of Asia, he said.

“Don’t set your watch by this,” Musk told an analyst, calling his estimate of a three-year wait before the start of production a “rough target.” Tesla probably will make the smaller and cheaper Model 3 sedan and upcoming Model Y crossover in China and won’t build the pricier Model S or Model X there, he said.

In June, Tesla said it was working with the Shanghai government to explore local manufacturing. A plant in China would reduce shipping costs and make vehicles like its new Model 3 sedan more affordable. Autos imported into the country are subject to a 25 percent tariff that’s made Model S sedans and Model X crossovers more costly than in U.S. showrooms.

Tesla’s lone car assembly plant is in Fremont, California. The company won’t start making significant capital expenditures in China until 2019, Musk said.