Tesla plans new factory in Shanghai that would double China production to a million cars a year as demand for electric vehicles soars
- The US carmaker will soon begin construction of a new plant in the Lingang free-trade zone near to its enormous Gigafactory 3, said two sources
- The move represents a huge effort to ramp up production amid soaring demand for Tesla’s electric vehicles from customer in China and abroad
Reuters reported on Thursday that Tesla is eyeing annual capacity of up to 2 million units in Shanghai after expansion. But the sources who spoke to the Post, on condition of anonymity, said that is more likely to be the longer-term figure rather than the immediate capacity that becomes available once the new plant is complete.
Telsa China declined to comment.
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Tesla breaks ground on first overseas factory in China
“I believe that Tesla will build a new factory in China sooner rather than later,” said Gao Shen, an independent analyst in Shanghai. “The company has already shown how fast it can build a plant when the first phase of the Shanghai factory was constructed.”
The Shanghai factory, Tesla’s first beachhead outside the US, is the only car assembly line fully owned by a foreign investor in mainland China.
Tesla China last month described the Gigafactory 3 as a “crucial manufacturing hub”, and said it had delivered 484,130 vehicles in 2021, representing just over half of the company’s global total of 936,000 units.
On the mainland, it sold 321,000 Model 3 and Model Y vehicles, more than double the number from a year earlier.
The remaining 160,000 or so Shanghai-made cars were exported to markets like Germany and Japan.
The Gigafactory 3 now has a capacity of 450,000 vehicles a year.
In a filing to the environment regulator in Shanghai early this week, Tesla said it aimed to expand the production of car parts at the Shanghai factory. It plans to hire additional workers and run the plant for longer each day.
The application for an environment assessment is being reviewed by the regulator.
In November, Beijing Daily reported that Tesla would invest up to 1.2 billion yuan (US$190 million) to increase capacity at its Shanghai plant, and would employ 4,000 more people to rev up production.
The Shanghai municipality has been a strong supporter of Tesla’s local production as China aims to transform itself into a global leader in the EV sector.
In May last year Tesla put its plan to buy a new plot of land on ice because of concerns about US-China tensions.
Reuters reported at the time that an additional 25 per cent tariff on EVs imported from China to the US that was imposed by former President Donald Trump had deterred Tesla from expanding output at the Shanghai factory.
China reported sales of 2.99 million new-energy vehicles – an umbrella term for pure electric, plug-in hybrid and fuel-cell cars – in 2021, up 169 per cent on the year.
NEV deliveries could advance by another 84 per cent this year to top 5.5 million units, according to Cui Dongshu, general secretary of the China Passenger Car Association.
