Tesla zeroes in on Beijing for design centre to build Chinese-style cars for the mainland market
- The design and engineering hub will be one of the key projects in Beijing this year, according to a report by the city government
- Tesla said in January 2020 that it would establish a design centre in China to better serve customers
The US carmaker’s design and engineering hub will be one of the key projects in China’s capital this year, according to a report by the Beijing municipal government.
Construction of the centre will start this year, but other details such as investment and inauguration date were not provided.
“Tesla has every reason to increase investment in China amid strong sales of its vehicles in the country,” said David Zhang, a researcher for the automotive industry at the North China University of Technology. “Building Chinese-style cars for Chinese people is a good idea and it obviously is stepping up a gear to implement its China strategy.”
In January 2020, Tesla said that it would establish a design centre in China to better serve customers in one of its biggest markets. The announcement came just a month after the Elon Musk-helmed carmaker launched operations at the Gigafactory 3 in Shanghai, Tesla’s first plant outside the US.
Tesla China declined to comment on the design centre on Friday.
The Gigafactory, with annual production capacity of 450,000 units, delivered 484,130 vehicles in 2021, representing 51.7 per cent of its global total of 936,000 units.
Excluding exports of the Shanghai-made Model 3 and Model Y vehicles, Tesla sold 321,000 cars on the mainland last year, 117 per cent higher than 2020.
The Shanghai factory, based in Lingang free-trade zone, is the mainland’s only fully foreign owned vehicle assembly line.
Tesla is the runaway front runner in China’s premium electric vehicle segment, as the hi-tech features of its products, including Autopilot driver assistant system and high-performance batteries, easily click with young Chinese drivers.
Tesla is not the first foreign carmaker to set up a design centre in China.
General Motors founded its Shanghai-based Pan Asia Technical Automotive Center in 1997 to design and develop vehicles specifically for the mainland market.
The Chevrolet Sail, a compact car launched in 2001, was the first vehicle fully designed and developed by local engineers for the Chinese market.
China’s automotive industry surpassed the United States in 2009 as the world’s largest vehicle market, and has retained the title ever since.
Over the past two years, new-energy vehicles (NEVs) have emerged as the new growth engine for the country’s carmaking sector, which has been buoyed by Beijing’s ambitions of becoming a global leader in the future of mobility.
NEV sales are expected to top 5 million units this year, according to the China Passenger Car Association.