The first-phase construction of Gigafactory 3 of Tesla broke ground in Shanghai Linggang Industrial Area on Jan. 7.
With investment exceeding 50 billion yuan, the factory is the largest foreign-invested project in the city up to now. Following completion of the first-phase construction, scheduled in summer this year, the factory will turn out 3,000 units of Model 3 weekly, which will rise to 500,000 units a year eventually. Elon Musk, Tesla CEO, noted that the factory may also produce Model Y in the future, although production of ModelS/X with even higher price tags will remain in the U.S.
Musk also pointed out that the company will start receiving local orders this week, which can be delivered in March, adding that the Shanghai factory underscores Tesla's commitment to the Chinese market. Market players believe the project is meant to evade tariff and trade barrier. Musk admitted that it is impossible to penetrate the Chinese market without a local production line, adding that China has become the global leader in electric-car application. Local media reported that the project enjoys strong backing from the Shanghai government.
Markey players pointed out that thanks to the Shanghai factory, sales prices of Tesla cars will drop considerably in China, exerting great pressure on indigenous new-energy cars, especially given gradual removal of existing subsidies. The new-energy car operation of SAIC Volkswagen may be the one receiving the largest impact, as it is investing 17 billion yuan in building a Shanghai factory, with projected annual capacity of 300,000 cars. With a schedule similar to Gigafactory 3, the factory will produce most new models of SAIC Volkswagen, especially those with modularized MEB chassis, which will own an edge in mass production.
The Shanghai factory will enable Tesla to evade the U.S. tariff on the in-car computer of Model 3, which is supplied by a Chinese manufacturer.
(Collaborative media TechNews, first photo courtesy of Tesla)
