Tesla planning new Shanghai factory that will double its production in China to one-million units a year

Tesla plans to build a new factory in Shanghai. Reports says that the new plant will be in the Lingang free-trade zone, near to the existing Gigafactory 3, Tesla’s first plant outside of the US and the only car factory fully owned by a foreign party in China. In the world’s biggest auto market, a joint venture with a local firm is the usual requirement.

According to Reuters, Tesla is eyeing annual capacity of up to two million units in Shanghai after this expansion. But the South China Morning Post says that 2m is likely to be a longer-term figure, and that immediate capacity is more likely to be doubled to at least one million cars per year. Tesla China declined comment.

Tesla China said last month that it delivered 484,130 vehicles in 2021, which is just over half of the company’s total global sales of 936,000 units. In mainland China, Tesla sold 321,000 Model 3 and Model Y vehicles last year, more than double 2020 figures. The other 160,000 or so Shanghai-made Teslas were exported to markets like Germany and Japan.

The Gigafactory 3 – which took just over a year to complete before local deliveries started in early 2020 – currently has a capacity of 450,000 units a year.

The demand is there – last year, China reported sales of 2.99 million new-energy vehicles (NEV includes pure EVs, plug-in hybrids and fuel-cell vehicles), up 169% year-on-year. The China Passenger Car Association predicts that NEV sales could go up by another 84% this year to top 5.5 million units.

In November 2021, Beijing Daily reported that Elon Musk’s EV company would invest up to 1.2 billion yuan (RM798 million) to increase capacity at its Shanghai plant, and would employ 4,000 more workers to ramp up production.

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