Tesla close to Shanghai plant deal

Tesla Inc is taking another step toward making cars in China, after reportedly inking a preliminary deal with the Shanghai government to set up a plant in the coastal city.

The United States electric vehicle maker signed a preliminary investment proposal in May with the local authority, which could give Tesla the green light to build a factory in Shanghai's southeastern Lingang Area, Chinese financial media outlet Caixin reported on Thursday, citing insiders with knowledge of the matter.

In an emailed reply to China Daily on Friday, the Shanghai Municipal Commission of Economy and Informatization - the local industry and information regulator - said the government is highly supportive of innovation and the development of new energy cars, and that it is optimistic about Tesla's development globally, as well as in China.