Tesla denies report it is planning to open a factory in Guangdong, China

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Despite a Monday report to the contrary, Tesla Motors says it has no current plans to build a factory in China's Guangdong province.

Guangdong's local newspaper, Southern Metropolis Daily, cited multiple sources and said the electric vehicle maker is planning to individually fund and build a factory in the province.

"(The) factory address has been picked, the plan is waiting for approval from relevant department in local government," the report said. "If the plan goes smoothly, Tesla will announce this project within this year."

But Tesla denied the report when contacted by CNBC.

"Tesla is deeply committed to the Chinese market, however the rumors that we plan to open a factory in Guangdong are not true," a company representative said in an email.

By manufacturing electric vehicles within China, Tesla could theoretically reduce its border tax, the Southern Metropolis Daily report noted.

Tesla, which crossed a market cap of $49 billion last week, remains a dominant player in the electric vehicle market and pulled in more than $7 billion in revenue last year.

But competition is heating up, thanks to start-ups — many of which are funded by Chinese venture capital investors — aiming to stake their share in the market.

— CNBC's Barry Huang and Joe D'Allegro contributed to this report.