Tesla has completed the establishment of a wholly-owned subsidiary in China, as the US electric vehicle manufacturer looks to expand its presence in the world's largest electric vehicle market.

This follows a recent Chinese government announcement it would scrap shareholding limits for foreign investors in new energy vehicles in 2018.

Tesla received a business licence for its new Shanghai-based subsidiary from the Pudong New Area authorities last week, according to local reports citing data from the National Enterprise Credit Information Publicity System.

The new Shanghai subsidiary is wholly-owned by Tesla Motors HK and has a registered capital of CNY100m (US$15.7m). Its business licence covers technology development and transfer in the fields of electric cars, auto parts, batteries, energy storage equipment and photovoltaic products, and the wholesale and import and export of such products, according to local reports.

Tesla is looking to set up a factory for its vehicles in China and is in discussions with the Shanghai Municipal Commission of Economy and Information Technology on its planned investment.