Tesla to start shipping China-made Model 3s to Asian markets in push back to Trump’s plan to win back manufacturing jobs
- Tesla’s Gigafactory in Shanghai to ramp up production for Asia-Pacific markets currently supplied by California plant, Bloomberg reports
- Decision makes sense as China has strong supply chains and a major hub for EV components
The carmaker will ship Model 3s produced at its US$2 billion Gigafactory outside Shanghai to reduce costs and shorten the delivery time to its customers in Singapore, Australia, New Zealand and Europe, Bloomberg reported earlier on Friday, citing people familiar with the decision.
The move suggests Elon Musk will need to ramp up Tesla’s production capacity to meet demand around the region, and stay ahead of a slew of domestic electric-vehicle producers like Nio and Xpeng. These export markets are currently supplied by Tesla’s main factory in Fremont, California.
“With the export plan, Tesla has to scale up their investment in China, including hiring more people to increase the production,” said Tommy Wu, a senior economist at Oxford Economics. “To an EV company, increasing production in China makes sense as it now is the major hub of core components, including batteries.”
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The move appears to go against President Donald Trump’s efforts to bring more manufacturing jobs back to America, and sell its goods around the world, Wu added. Trump’s complaint on the loss of jobs to factories in China is one of the reasons behind the escalation in US-China trade tensions over the past two years.
Tesla currently assembles Model S, Model X, Model Y and Model 3 in Fremont, California. It is also building a factory in Berlin, its first in Europe, which is expected to start production in mid-2021.