Tesla Is Looking Into a Chinese Car Factory

The electric car manufacturer could start producing some of its cars in China.

Tesla is evaluating the possibility of a car factory in China with the help of the Shanghai government, the automaker confirmed in a statement on Thursday.

The automaker would likely use a Chinese factory to navigate around a 25-percent tax on imported cars. Tesla explained the potential move as a way to “ensure affordability for the markets they serve.”

“Tesla is working with the Shanghai Municipal Government to explore the possibility of establishing a manufacturing facility in the region to serve the Chinese market,” a spokesperson with the automaker said in a statement. “Tesla is deeply committed to the Chinese market, and we continue to evaluate potential manufacturing sites around the globe to serve the local markets.”

If Tesla were to start building cars in China, it expects that the majority of its production would continue to stay in America, according to the automaker.

It’s unclear what Tesla models the automaker would choose to manufacture out of a Chinese production facility. 

The automaker is looking to have a better idea of whether it intends on building out a factory by the end of 2017.

Earlier in June, Tesla CEO Elon Musk explained on Twitter that he is in talks with the Indian government so that the automaker could secure “temporary relief on import penalties/restrictions.” Musk also said that the company is working to build a factory in the country to avoid those import fees.