Tesla plans Chinese plant with 500,000-vehicle capacity

Mark Brake  Getty Images

Mark Brake Getty Images

The Shanghai municipal government, Shanghai Lingang Area Development Administration, and Lingang Group have all agreed to allow the Tesla factory to operate and produce up to 500,000 new electric vehicles every year.

Tesla is expected to soon make the announcement its next Gigafactory in Shanghai, China, after the Shanghai government announced that an initial agreement has been made.

China is an extremely important market for Tesla. From there, it will take roughly two years until we start producing vehicles and then another two to three years before the factory is fully ramped up to produce around 500,000 vehicles per year for Chinese customers. While Musk, 47, said more than two years ago that he expected Tesla would produce that many vehicles a year from its lone auto plant in California by 2018, the company is well off that pace because of slower-than-expected output of the Model 3 sedan.

China is the world's biggest electric vehicle market but Tesla and other producers including GM and Nissan Motor Co. had been reluctant to transfer manufacturing to this country due to the requirement to share technology with Chinese partners that might become rivals.

Musk has said Tesla will be cash-flow positive this year.

The preliminary agreement is a major development in Tesla's more than yearlong effort to open China's first production facility that will be wholly owned by a foreign carmaker.

In its statement, the Shanghai government suggested it could help with some of the capital costs.

France advances to World Cup final, beats Belgium 1-0
This time, they had to get past a five-time world champion, which gives them much more credit to feel that this time is the time. While there is a clear contrast in styles of the two sides, France and Belgium lock horns in a potential World Cup classic.

The plant will be based in the Lingang area, close to Shanghai's Yangshan port, and will count as the largest foreign manufacturing project in the Chinese financial center's history, Knews said.

"Today's announcement will not impact our US manufacturing operations, which continue to grow". Most big American auto companies avoid hefty import tariffs by making many of their vehicles for the Chinese market inside the country through joint ventures with local partners. The country has a stated goal of 100-percent electric vehicles by 2030, as part of its plan to tackle air pollution, so a Tesla plant in the country makes sense. The WSJ reports that China is Tesla's second-biggest market outside of the US and that it sold about 17,000 cars there in 2017 compared to the 50,000 stateside.

Chinese authorities' decision to grant Tesla permission to move forward lands as President Trump is fighting to stop US manufacturers from responding to his trade policy by shifting production overseas, as USA motorcycle maker Harley-Davidson Inc (HOG.N) said it would do last month.

Tesla did not respond to a Reuters request for comment.

Chief Executive Officer Elon Musk sealed a crucial agreement Tuesday to start building its second auto assembly plant in the world. Bloomberg reported on Monday that Musk will visit Beijing on Wednesday and Thursday.

Tesla is among companies hit by additional 25 percent import duties imposed by Beijing in retaliation for a tariff hike by U.S. President Trump in a dispute over technology policy. It's been an idea Musk has mentioned to investors since a year ago.

Noticias recomendadas

Nos complace brindar esta oportunidad para compartir información, experiencias y observaciones sobre lo que está en las noticias.
Algunos de los comentarios se pueden reimprimir en otras partes del sitio o en el periódico.
Gracias por tomarse el tiempo para ofrecer sus pensamientos.