China is a critical market for Tesla — and the automaker could build a factory there soon (TSLA)
Tesla is making big moves to secure the Chinese market, which could be its most lucrative opportunity yet.
Tesla is close to finalizing an agreement with the city of Shanghai that would allow it to build manufacturing facilities in the area as early as this week, Bloomberg first reported. Details are still being finalized, but the deal would allow Tesla to build plants in Shanghai's Lingang development zone.
A Tesla spokesperson did not immediately return Business Insider's request for comment.
The electric car maker has had its eyes set on China, which has sold more electric cars than Europe and the US in both 2015 and 2016. China is likely to witness more electric car sales as the government continues to tighten fuel emissions standards.
Chinese internet giant Tencent acquired a 5% stake in Tesla in March, highlighting a vote of confidence in Tesla's position in the world's most populous country. Tencent will serve as a passive "advisor" to the company going forward.
Tesla has ambitious plans to boost production from 83,000 vehicles per year to 500,000 by 2018. In addition to China, Tesla CEO Elon Musk is also working with the government of India to relax import penalties until it can build a local factory.