A handful of local Chinese news platforms has recently reported that American electric car manufacturer Tesla is planning to establish a factory located in China's Guangdong province. Despite the amount of attention the news have garnered, Tesla denied the report.

Southern Metropolis Daily, Guangdong's local newspaper, reported about Tesla's alleged plan. The newspaper cited multiple sources to back up the claim. The report added that Tesla is planning to individually fund the whole construction of the facility.

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

A Tesla spokesperson told CNBC that the company is not building the cited facility. The spokesperson added that while Tesla is committed to the Chinese car market, the rumors about opening a factory based on Guangdong are untrue.

Many market analysts have speculated about Tesla's plan to build its own facility in China for quite some time now. One of the obvious, and perhaps most practical, reasons why Tesla should do it is to reduce border tax. China levies significantly reduced tax on cars that are manufactured locally, compared to cars that are imported.

Last week, Tesla overtook Ford Motor in terms of market value. Tesla remains to be a dominant force in the car market and the company has posted more than $7 billion in revenue last year.

The car company has steadily risen over the years, and The New York Times recently reported that Tesla overtakes General Motors as the most valuable automaker in America. Tesla is now valued at $50.887 billion, which is about $1 million more compared to GM's value.

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