Tesla plans to produce electric vehicle chargers in China

Tesla Inc said on Thursday it prepared to start making electric vehicle chargers in China by 2021, part of the U.S. automaker’s push to increase sales in the country.

Tesla, which now sells its Model 3 electric cars in China and prepares to deliver its Model Y sport utility vehicles in 2021, prepares to spend 42 million yuan ($6.4 million) in a new factory for making its third generation of quick chargers, known as the Supercharger V3, it said in a statement.

The factory will be near its car plant located in Shanghai.

China, which offers subsidies for electric vehicles as it seeks to curb pollution from petrol or diesel cars, has been expanding the country’s network of charging points, one of the biggest obstacles to encouraging adoption of EVs.

The factory, which Tesla expects to finish in the first quarter next year, will have the capacity to make 10,000 chargers annually, the automaker said.

Tesla, which sold over 13,000 vehicles in China in October, said it would expand research capabilities in Shanghai.

China now imports EV chargers, generally installed in charging stations or vehicle parks, from the United States.

The Shanghai car factory, important to Tesla’s worldwide growth strategy, aims to produce 150,000 Model 3 sedans this year and has started exporting some automobiles to Europe.

Executives at Tesla said this year that the automaker would expand its charging network to offer better service.