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Tesla cleared to start mass production of electric cars in China

Tesla's Chinese factory could be a make or break moment for the automaker.

Tesla Shanghai factory
Tesla Model 3s should be rolling out of here at scale very soon.
Hector Retamal/Getty Images

China buys the most "new-energy" vehicles out of any other country in the world. That's despite smaller government incentives to do, at that. Naturally, automaker cater to this market with plenty of electric cars, including Tesla. However, the electric-car maker is nearly ready to turn on the lights on its first local production plant.

Bloomberg first reported on Wednesday that China's Ministry of Industry and Information Technology has approved Tesla to begin mass production of vehicles in the country. The permit follows overall certification to manufacture in China. The automaker has already started preproduction at a low scale in preparation for mass production.

The Chinese production facility -- the first Tesla manufacturing hub outside of the US -- is part of a big bet CEO Elon Musk has made. As the company is still flirting with profitability, China could unlock greater scale, sales and profits as the company taps into local demand for electric vehicles. Production start, however, comes as the Chinese auto market cools down dramatically amid the US-China trade war. Nevertheless, it remains the world's largest auto market by a long shot.

The Bloomberg report said the factory will first build Model 3 sedans locally with a price around the equivalent of $50,000. While that's more expensive than what the Model 3 sells for in the US, it's likely significantly cheaper than paying tariffs imposed on US autos shipped to the country.

As Tesla turns global, it's also provided a final decision on its European Gigafactory. Yesterday, Musk said it will construct the facility in Germany outside of Berlin. That factory will eventually be responsible for European production of Tesla vehicles, but it likely won't be ready for a couple of years.

Back at home, the automaker is will gear up for the reveal of another hotly anticipated vehicle. Nov. 21 will see the Tesla electric pickup, aka the Cybertruck, debut.

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