China To Remove JV Requirements For Foreign Automakers, Tesla Wins

APR 17 2018 BY MARK KANE 42

China will phase out the joint-venture requirements for foreign automakers, which could open the way for more fair business practices for automakers such as Tesla.

China

The Beijing National Development and Reform Commission (NDRC) said that this year requirements will be removed for New Energy Vehicle and special-use vehicles.

In other words, companies like Tesla would be able to set up a production facility for the Model 3 or Model Y in China on its own, with no need to establish a joint venture with a Chinese corporation.

This is exactly what Elon Musk wanted to see happen.

Read Also – Buick Velite 6 PHEV & BEV To Launch In China

In the longer term, China will remove the requirements for commercial vehicles by 2020 and passenger cars (non plug-ins) in 2022.

As we previously reported:

“For years, there were requirements to set up joint ventures with Chinese companies (at least 50% share) to produce and sell cars in China, which for foreign manufacturers could mean loss of control over technology.”

“On the other hand, a 25% import tax on cars prevented competition through import. There were also other policies like subsidies for New Energy Vehicles (only with batteries produced locally) and more.”

And here again is Musk’s recent Tweet on the topic:

And here’s a little who owns whom graphic – note Tesla is a standalone in China:

Source: just-auto.com, Gasgoo

Categories: China, Tesla

Tags:

Leave a Reply

42 Comments on "China To Remove JV Requirements For Foreign Automakers, Tesla Wins"

avatar
newest oldest most voted
Another Euro point of view
Guest
Another Euro point of view

I am not sure that Tesla wins because of this change.
This means they will have to make it all on their own without a local partner. At this point I wonder whether letting Tesla do anything on its own is a good thing. Perfect partnership would have been to let the Chinese take care of production while Elon is doing the hype. After all that’s how Apple made a fortune. Color me (and the financial markets) somehow skeptic.

Robb Stark
Guest
Robb Stark

ROTFLMAO

ffbj
Guest
ffbj

Ouch. I just tripped over you.

Get Real
Guest
Get Real

Yes, LMAO too as Another Euro Troll POS desperately tries to spin his serial anti-Tesla FUD as he drives around in his Euro Auto OEM “Clean Diesel” and hopes those OEMs can catch up to Tesla’s innovations before Tesla scales up to be an even bigger threat to their luxury/sport divisions.

F150 Brian
Guest
F150 Brian

Get Real, too bad your posts never live up to your handle.

I will now refer to you as Auntie FUD.

Get Real
Guest
Get Real

Is your truck a diesel too?

William
Guest
William

Really, you have to ask?
If it’s not a “DIEsell”, then it probably is an ICE with no catalytic converter.

SparkEV
Guest

“have to make it all on their own without a local partner.”

Have to? I don’t see any wording in there that prevent local partnership, merely that one is FREE TO CHOOSE not to partner. Some people don’t know freedom if it kicked him in the teeth.

Stimpacker
Guest
Stimpacker

Amazing how anything can be soon as bad for Tesla.

….. And I’m supposed to be a FUDster

Willem-Alexander
Guest
Willem-Alexander

> After all that’s how Apple made a fortune.

No, Apple never formed a 50/50 venture with Foxconn who makes their phones.

They contracted them out to Foxconn to make their phones.

Huge difference.

Windbourne
Guest
Windbourne

LOL.
Other way around. Apple was making a KILLING.
Because they spun it off, did relatively little for them, but it helped make fox conn into whom they are.

Pushmi-Pullyu
Guest
Pushmi-Pullyu

Another Euro FUDster said:

“This means they will have to make it all on their own without a local partner.”

WOW! 😯

When it comes to twisting good news — heck, in this case it’s great news for Tesla! — into something that sounds bad, the serial Tesla bashers are endlessly inventive!

But that’s not the most outrageous or most ridiculous thing that “Another Euro FUDster” has ever posted. For example, there’s this:

“How will hubby explain to wifey that their hard won cash just blew up in smoke buying Tsla stock… That may lead to divorce, that to children with substance abuse issues etc.”

https://insideevs.com/vw-ceo-blasts-tesla-low-sales-losing-millions/#comment-1348778

Bob Reinicke
Guest
Bob Reinicke

Yes, going it alone in China would be a huge mistake for Tesla, even if they had the money to do it. The ideal solution is the Apple/Foxcom extremely successful business relationship. But what contractor would risk billions of dollars to set up a Gigafactory, given Tesla’s current dire financial straits? Probably nobody. However, a Chinese contractor with a pending Tesla contract in hand, could I IPO to raise significant risk tolerance funding to handle startup costs. This is a solution to Tesla’s big problem.

(⌐■_■) Trollnonymous
Guest
(⌐■_■) Trollnonymous

“I am not sure that Tesla wins because of this change.”

Me either.
It would’ve been better to reduce their Tariff, that way all US car mfgr’s can benefit importing them in.

Robb Stark
Guest
Robb Stark

They are reducing import tariffs in addition to eliminating JV requirements for new energy vehicles, i.e. electric cars and hydrogen powered cars, to produced in China.

Paul K
Guest
Paul K

Never thought I would agree with anything Trump did, but he went eyeball to eyeball with China over their unfair trade practices and China blinked first. That’s why the JV requirements are being dropped and the tariffs lowered.

Benz
Guest
Benz

No, not because of Trump.

They had already planned to do so.

Google “Khorgos”.

Fool Cells
Guest
Fool Cells

Trump Derangement Syndrome is alive and well with you.

Benz
Guest
Benz

You are mistaken, or you must have been smoking something very weird.

esto perpetua
Guest

Repeat after me: Thank you President Trump!

ffbj
Guest
ffbj

Yes, and the reason being is that we buy way more of their stuff, than they do of ours. This was already in the works but though I am adamant to give Trump credit for anything positive, in this particular case, he is in the right.

Pushmi-Pullyu
Guest
Pushmi-Pullyu

“Never thought I would agree with anything Trump did, but he went eyeball to eyeball with China over their unfair trade practices and China blinked first.”

Yeah, I’m with you 100%. I never thought I’d see any reason to agree with anything he has done or will do as President, let alone praise him. However, this looks to be a very large exception, and one that is very important for Tesla. Give the Devil his due; it looks like he got a big win here from China!

tftf
Guest
tftf

Tesla wins?

How so?

TSLA still needs fresh billions and a few years to set up a factory.

Do people think a modern car factory can be set up overnight for chump change?

Tesla’s competitors have deep pockets and decades of experience in China – they produce(d) EVs well before Tesla locally in China.

Get Real
Guest
Get Real

LMFAO over and over at admitted Tesla shorter Trollftf who is not too bright apparently.

Yes, the established OEMs have JV factories in China that they are NOW STUCK WITH while Tesla is free to build a 100% owned by them factory there for local production.

Of course, the established OEMs can do the same but they are still stuck with their Chinese JV sunk costs in facilities and business.

tftf
Guest
tftf

Buying out a JV partner doesn’t occur to you? Get Real?

Also , where is the money for a new Tesla China factory coming from?

Billions required.

Get Real
Guest
Get Real

LMAO, this is too easy.

Trollftf wrote:
“Buying out a JV partner doesn’t occur to you? Get Real?”

Actually, it did occur to me and using the logic that your propaganda FUD lacks I came to the conclusion that “Buying out…” will cost the laggard OEMs even more money!

As far as Tesla building its own factory in China, I’m sure they will have no problems financing that either since China is the fastest growing auto and EV market in the world and has a rapidly growing wealthy class eager to own Western luxury brands and tech.

Pushmi-Pullyu
Guest
Pushmi-Pullyu

tftf posted more anti-Tesla FUD:

“Tesla wins?

“How so?”

I guess you need to turn down the gain on your Reality Distorting Tesla Hater goggles, because the article spells out very clearly why this is a big win for Tesla.

I think the average person doesn’t need a kindergarten-level explanation of just why it’s good that Tesla now won’t have to split its profits — let alone cave in to China’s demand for a minority (less than a 50-50) split of the profits with a Chinese auto maker, to avoid paying excessive fees and tariffs on its cars. Other auto makers have caved in to this demand, and recently it looked like Tesla was also about to do so, with its plan for a partnership with a Chinese auto maker to make Tesla cars in China.

Assuming this change in China’s policy is real, that it’s a done deal and not just a negotiating ploy by China, then this is a huge win for Tesla!

Go Tesla!

Art Vandelay
Guest
Art Vandelay

Funny, first good thing that comes from the Trump administration, and quite possibly this just might be a reason why he’ll get re-elected. Will be long 6.5 more years for you guys and for us on the other side of the pond as well. Anyway, now it’s time for Europe to drop the 10% tariff on cars and for US to drop the 2.5% tariff on cars and 25% tariff on light trucks, I want my Model 3 to be 10% cheaper…

Get Real
Guest
Get Real

Trump has no chance of being re-elected and a large chance of not even finishing his first term.

He will easily go down in history as the most corrupt and incompetent President in history with the collateral damage of basically destroying the Republican Party that has become synonymous with his maladministration.

Pushmi-Pullyu
Guest
Pushmi-Pullyu

Indeed. This administration makes the U.S. Grant administration look like a paragon of ethical virtue and honesty, by comparison!

I am truly shocked, on an almost daily basis, that the Republican party has not already impeached the Cheeto-in-Chief. Richard Nixon was far, far less dishonest and did far, far less damage to our country than the Big Cheeto, and Nixon was much closer to the mainstream Republicans than the C-in-C is!

I wonder if the GOP is ever going to recover from this? It’s entirely possible we’ll see a new third party arise, one which will push the GOP into a minority party. And to those who say “Never gonna happen”, I will point out that has already happened several times in our country’s history! Past presidents include 4 Whigs, 1 Federalist, and 2 National Unionists.

Ron M
Guest
Ron M

During Xi’s speech last week at the Asian conference that was similar to Davos, Xi said a lot of positive things. I thing Trump knew what Xi was planning to say there and wanted to make it look like He Trump got concessions from Xi. Similar to talking to the Mexican President and telling him he was just telling his base that he was building a wall and Mexico is gonna pay for it. He wanted the Mexican President to go along with his lie.

SparkEV
Guest

Yeah, it’s like Xi is shedding Mao and becoming Deng. I hope more so in the future. It’ll be good for China, great for the world.

SparkEV
Guest

This is not only win for Tesla, but a HUGE WIN for China. Without this barrier, companies are more likely to invest in China, which means hiring Chinese workers who will acquire the skills and knowledge. In the end, it’s the people who matter, not the bureaucrats who get kickbacks from local companies pushing stupid rules to stifle competition.

DJ
Guest
DJ

And every other single automaker out there who wants to manufacture NEVS. Not having to share your IP with someone that will just turn around and stab you in the back is a great win for foreign companies that want to operate in China.

But hey, “Tesla wins”…

SparkEV
Guest

“Stabbing in the back” is overrated. Foreign companies will hire Chinese for work. If “stabbing in the back” is a concern, they’d stay out of China since workers can learn the stuff and go work for competition. I think IP rights addresses the issue, not partnering.

And enforcing IP rights is another huge boon for China and the world. The they will learn and come up with even better ways to do things since they can’t simply copy. With so many minds at work in doing it better rather, that will benefit the humanity.

Huhu
Guest
Huhu

This policy change has been long time in the making in China. The central government realized too much protection was not helping domestic innovation, so it was decided last year in the party congress to change the policy despite strong resistance from some local governments and car makers.

Benz
Guest
Benz

Correct

Smokey
Guest
Smokey

This was because of Trump…but the liberals will never give him credit for it, their blind hatred of the guy prohibits that.

Benz
Guest
Benz

No

China has a plan.

This decision is just one step, they already knew that they would have to take.

zll
Guest
zll

Thank you President Trump.

Benz
Guest
Benz

For what?

Benz
Guest
Benz

When will Tesla probably start the production of the Tesla Model 3 in China?

2021?