Shanghai aims to become the country's production base for U.S. electric car maker Tesla Motors Inc, according to Bloomberg, citing a person familiar with the matter.
According to the report, Shanghai-based Jinqiao Group has signed a non-binding memorandum of understanding with Tesla on building its production facilities in the city.
Each party may invest about 30 billion yuan ($4.5 billion) in the partnership, with Jinqiao putting up land for most of its share, the person said.
Southeastern cities, such as Suzhou and Hefei, have also been actively seeking potential partnerships with Tesla, according to the person.
Both sides have not yet commented on the possibility of the deal.
However, in late May, Tesla's Chief Technology Officer and co-founder JB Straubel told China Daily that adding a factory only makes sense after the market has reached a "critical mass", meaning the electric car giant still needs a convincing scale before it decides to add a production site in China.
On April 27, Xin Guobin, vice-minister of industry and information technology, had a meeting with Jon McNeill, Tesla's president of global sales and service in Beijing.
The ministry said on its website that talks centered on development of Tesla's China business and further cooperation.
The first mass-market car Tesla launched on April 1 this year has received the second-most preorders from China, according to Ren Yuxiang, Tesla's head for Asia Pacific, who didn't disclose the specific figures.
The country was Tesla's second largest market last year despite a slump in revenue.
A report in this newspaper at the end of last year quoted Tesla CEO Elon Musk as saying the company planned to build a factory in China in three years, without providing details such as the location.
