The Chinese Ministry of Industry and Information Technology added Tesla to a list of approved car manufacturers on Thursday. This means that the automaker can now start producing in China.
Tesla is already building a 2 billion dollar (1.8 billion euro) factory in Shanghai, which would be the brand's first overseas car factory. Earlier Tesla's plan was already unveiled to start production in this factory in October.
Tesla wants to achieve a production of more than a thousand Model 3 cars in China this year, but the question is whether that is feasible. There is uncertainty about orders, employees and suppliers, among other things.
The automaker does receive extra support from the Chinese government. The authorities offered help with the dismantling of the factory and Tesla models were excluded from a 10 percent car purchase tax at the end of August.
The fact that China is giving the factory the green light is exemplary of Beijing's policy of slowly opening the car market to foreign companies. The Tesla factory becomes the first car factory in China that is wholly owned by a foreign company.