Tesla seems to have smoothed out a patent dispute from a Chinese businessman, removing an obstacle to expand its electric car business into the important China auto market.

Zhan Baosheng allegedly registered the "Tesla" trademark before the Palo Alto, Calif.-based automaker came to China, Reuters reported.

"Mr. Zhan has agreed to have the Chinese authorities complete the process of canceling the Tesla trademarks that he had registered or applied for, at no cost to Tesla," Tesla said in an e-mailed statement on Wednesday, as quoted by Reuters.

The automaker previously announced in January that the conflict had ended; however, Zhan was working to bring Tesla to court over the matter last month.

"Tesla has successfully concluded an agreement with Mr. Zhan Baosheng to completely and amicably resolve the dispute between the parties," Tesla said in Wednesday's statement. "These actions remove any doubt with respect to Tesla's undisputed rights to its trademarks in China."

The company has additionally come to a commercial agreement with Zhan "for the transfer to Tesla of certain domain names, including tesla.cn and teslamotors.cn," Reuters reported. Tesla declined to disclose specifics on the deal.

Tesla founder and CEO Elon Musk believes China will become the electric automaker's largest market worldwide by next year. Putting the trademark dispute to rest removes a hurdle from Tesla's expansion into China, which is the world's biggest auto market.

"Tesla looks forward to continuing to grow its business in China and to expanding the impact of electric vehicles in this very important market," the carmaker said in the statement.

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