Elon Musk wants to build Teslas for the Chinese market in China; the question is "when?"
Elon Musk has been in talks with Chinese officials and automakers to bring Tesla production to China, according to a report from Reuters. The Tesla CEO reportedly said production could begin in two years.
Tesla has lagged somewhat in China, which is the largest automotive market in the world, only delivering 3,025 cars in China from January-September 2015. Local media reported that the company cut 180 jobs in China, a figure that Tesla declined to confirm, according to the Wall Street Journal.
The base rear-wheel-drive Model S 70 starts at 673,000 yuan ($106,000 USD) in China, but Musk thinks Chinese production could bring the price down by a third. That reduction would mean the price would be in line with what a customer would pay in the U.S. for a Model S, a significant savings.
The Wall Street Journal says that the Chinese government requires foreign automakers to partner with a local automaker to build cars in the country, hence why Tesla is courting Chinese automakers to establish a joint venture.
This isn't the first time Elon Musk has spoken about his Chinese production ambitions. In August 2014, Bloomberg reported that Musk said Chinese Tesla production would begin in four years. Tesla has also partnered with Chinese web search giant Baidu on mapping and autonomous car technology.
Of course, whenever Elon Musk provides a timeline, it must be taken with a grain of salt. For example, Tesla announced the Model X SUV in February 2012, promising deliveries in 2013; it only delivered, the first handful of Model Xs to customers in September 2015.
Moving production to China will undoubtedly help Tesla be more competitive in that market, especially with the Model X SUV and the affordable Model 3 in the pipeline, but we'll have to wait and see what the actual timeline turns out to be.
