Tesla Motors could begin production of cars in China in two years.

According to Reuters, Tesla CEO Elon Musk said his company is currently in discussions with potential Chinese partners to establish a local production facility.

Musk added that such a move could slash the cost of a Tesla by as much as a third.

Currently, a base Tesla Model S starts at just under $US103,000 in China.

Tesla could not confirm the Reuters report.

But a company spokesperson provided a statement to Business Insider: “We are in discussions with state and national government officials. Any decision would come as a function of those discussions. We hope to announce something definitive soon.”

Musk reportedly made his comments at a forum hosted by Tsinghua University in China.

Chinese regulations generally require foreign automakers to enter into a partnership with a local counterpart before producing vehicles in the country.

According to Reuters, Tesla has sold just over 3,000 cars in China so far this year.

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