Tesla can help China's electric car market grow bigger and stronger, says start-up WM Motors

CNBC
Updated
The electric car maker assembles all of its cars in the United States but is aggressively pursuing a plan to build a factory in Shanghai for the China market.

IfTesla (TSLA) moves its production facilities to China , it could help the entire electric vehicle (EV) market there grow bigger, according to the founder of a Chinese EV start-up.

"I think Tesla, a very good brand in the electric vehicle market, coming into China actually helps the whole electric vehicle market become bigger and become stronger versus the traditional cars," says Freeman Shen, founder of WM Motor.

The Chinese government has said that it will remove the strict ownership caps on EVs by the end of the year, allowing foreign companies to wholly own businesses in China. Previously, they were required to enter into joint ventures with local Chinese companies in order to operate in the domestic market.

Speaking at Auto China, Shen told CNBC's Nancy Hungerford that while he would welcome Elon Musk to Shanghai , he's unsure if that would happen, citing Tesla's recent production issues in the U.S. as a potential barrier.

"For automotive business, it's not only about the ownership," Shen said. "I think more importantly, it's the supply chain itself." While opening up a factory in China is "relatively easy," localizing the entire supply chain would take time, he said.