Tesla is reportedly closing a deal to make Shanghai its next car production center

Tesla has “signed a preliminary agreement” with the city of Shanghai to build its next Gigafactory there, according to a report from Bloomberg.

The deal would allow Tesla to begin construction of its facility near an industrial development zone in the outskirts of the Chinese megalopolis.

This would be a big move for the Californian car maker, which tripled its earnings in the country to more than $US1 billion (£790m) last year.

The move would also help the company to bring down production costs, Bloomberg reports, a crucial requirement for Tesla’s mass market expansion strategy.

Get the latest Tesla stock price here.

NOW WATCH: Mount Everest is not the tallest mountain in the world

NOW WATCH: Tech Insider videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.