Elon Musk wants Tesla electric cars to be offered on a global market, with both the US and European business already becoming well established. The next target is China, but it doesn't come without quite a few headaches.

Reuters is reporting that talks are currently in progress over setting up a Tesla manufacturing facility within Shanghai. Why is Tesla considering this rather than simply importing its cars? Because the Chinese government imposes a 25 percent tariff on imported vehicles.

Operating within China as a foreign entity comes with its own set of rules, however. The biggest of those is the requirement of a Chinese partner combined with the foreign company having no more than a 50 percent stake in the venture. In other words, if Tesla does build a manufacturing plant in Shanghai, it can only own half of it and would have to share its revenue, manufacturing processes, etc. with a partner.

As to who that partner would be, the most likely candidate right now is Tencent Holdings as it owns a five percent stake in Tesla. Tencent is an Internet-focused company, but that may be desirable to Tesla as there's less chance of its IP being copied as it could be by a Chinese vehicle manufacturing partner.

For now, it's unclear if a deal will be successful and when the manufacturing facility would be built. Tesla hopes it can have the details agreed before the end of the year.

This is the second day in a row a US car manufacturer is talking about a move into China. Yesterday Ford announced that the bulk of Focus manufacturing will move to China from 2019, which was a move originally planned for Mexico. Now Tesla is attempting to head East. President Trump will not be happy.