China may make a key policy change that would be a huge win for Tesla

Tesla Model STeslaA Tesla Model S.

Tesla may be about to secure a big win in China.

Chinese officials have shared a draft proposal with auto executives that show the country is preparing to relax rules that have forbidden foreign automakers from building in the country without a Chinese partner, the Wall Street Journal first reported.

Foreign companies would still be subject to a 25% import tariff, but they could build electric vehicles without a Chinese partner, according to the report.

The move would be a big win for automakers that have been hesitant to build in the country out of fear the partnership would compromise their intellectual property. Tesla has the incentive to protect its driver-assistance Autopilot technology that has become an integral part of the electric automaker’s brand.

A Tesla representative did not immediately return Business Insider’s request for comment.

Tesla CEO Elon Musk said in 2015 that he wanted to build in the country in three years time to help cut the price of Tesla vehicles in the country. The automaker has been talking with the city of Shanghai about building manufacturing facilities in the area, according to a June Bloomberg report.

Chinese internet giant Tencent acquired a 5% stake in Tesla in March, highlighting a vote of confidence in Tesla’s position in the world’s most populous country.

China, the world’s largest auto market, is an important country for Tesla. The company’s sales in China more than tripled in 2016, accounting for 14% of the company’s total revenue last year. China plans to eventually ban the sale of all diesel and petrol cars.

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