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Tesla Shanghai, the new China unit of the automaker, has been registered as it will focus on electric cars, spare parts, and batteries, according to the filing.

Tesla has had its electric firm in Shanghai registered on May 10 as China prepares to scrap rules on capping foreign ownership of new-energy vehicle ventures.

The U.S. automaker has been in protracted negotiations to set up its own plant in Shanghai to produce vehicles locally, helping bolster its position in the country’s fast-growing market for electric cars and to avoid high import tariffs.

Tesla’s New Company

The new company registered in south-east Shanghai within the city’s free-trade zone area lists Tesla China head Zhu Xiaotong as its legal representative, and Tesla Motors HK Limited as the sole shareholder in the firm.

Tesla currently imports all the cars it sells in China from the United States. It has other wholly-owned firms registered in China focused on sales and research and development.

China has said it will scrap limits on foreign ownership of NEV ventures this year and all automotive ventures by 2022, a major policy shift in the world’s top car market that has capped foreign ownership at 50 percent for over two decades.

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Trade Dispute Impact

U.S. firms have also been caught up in the crossfire of a bruising trade dispute between the two countries, although there are signs of a thaw in relations ahead of the second round of trade talks in Washington later this week.

Analysts have said the main beneficiaries of looser ownership rules would be NEV makers like Tesla, which has been keen to maintain control of its own plant and protect its technology rather than cede a 50 percent share.

Tesla boss Elon Musk has previously criticized China’s tough auto rules for foreign businesses, saying they created an uneven playing field. However, earlier this month he said the firm could soon unveil the location of a Chinese gigafactory.

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