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UPDATE 1-Tesla says exploring China car plant with Shanghai government

(Adds more comments from Tesla statement)

June 22 (Reuters) - Tesla Inc is exploring the possibility of establishing a Chinese manufacturing plant with the Shanghai municipal government, the U.S. electric carmaker said on Thursday in a statement.

Tesla has said it wants to build electric cars in China to avoid a 25-percent tariff on imported vehicles.

In the statement, it said, "While we expect most of our production to remain in the U.S., we need to establish local factories to ensure affordability for the markets they serve."

Tesla said it expects to "more clearly define" its China production plans by year end.

(Reporting by Norihiko Shirouzu in Beijing and Paul Lienert in Detroit; Editing by Chizu Nomiyama and Marguerita Choy)