Jan 09, 2019 (China Knowledge) - Earlier this week, Tesla’s CEO Elon Musk and Shanghai Mayor Ying Yong attended the ground-breaking ceremony for the electric carmaker’s new Gigafactory 3, for which the Shanghai government, in order to cover the cost, loaned out USD 6 billion.
China is now the global leader in electric vehicle adoption with many cities in China having made transitions towards electric vehicles for their public transport vehicle fleets.
The factory in Shanghai will be producing the more affordable versions of the company’s Model 3 and Model Y vehicles for sale in the Greater China region. For now, the timeline for the company is to complete construction by mid-this year and commence production by the end of the year.
While Tesla enjoys relatively high popularity in China, the company is facing increasing competition from local electric vehicle makers such as Nio, Xpeng Motors and Faraday Future. The new production facility in Shanghai will allow Tesla to localize production and become more competitive.
Producing vehicles locally can bring about up to a 60% cost reduction from expenses such as tariffs and shipping in addition to a lack of access to local subsidies.
Tesla aims to produce 3,000 Model 3 vehicles per week during the initial phase of the new Gigafactory before ramping up production to 500,000 vehicles annually when at full capacity.
Following the ceremony, CEO Elon Musk lauded the speed and quality of work available in Shanghai, particularly referencing how a large multi-bay Supercharger facility was just completed in 12 days last year, the fastest worldwide.
Copyright © 2018 www.chinaknowledge.com
Send feedback or comments to: firstname.lastname@example.org
For more news, financial weekly reports, business guides to China and other premium information, subscribe to China Knowledge today: www.chinaknowledge.com
To access our page on Bloomberg, type CKFI