Elon Musk to break ground on Chines Gigafactory

Model 3					Tesla Model 3 Performance gets 19-inch “Power Sports” Aero Wheels in China

It marks a major bet by Tesla as it looks to bolster its presence in the world's biggest auto market where it faces rising competition from a swathe of domestic rivals and its sales have been hit by increased tariffs on US imports.

Tesla boss Elon Musk said the electric car-maker would break ground Monday on a Shanghai factory that will allow it to sell direct to Chinese consumers and avoid tariffs from the China-US trade war.

Tesla's Shanghai venture comes as USA companies face pressure from President Donald Trump to keep manufacturing jobs at home, and as Beijing and Washington persist with a trade spat that has seen both sides levy tariffs on hundreds of billions of dollars of products. The challenging environment also includes competition from several startups that all want to be like Tesla.

"Aiming to finish initial construction this summer, start Model 3 production end of year & reach high volume production next year", Musk wrote in a separate post on Twitter.

A local Chinese plant may be crucial for Tesla, which is struggling to stave off a potential dip in demand in the USA, its biggest market, after reductions in federal tax credits for EVs.

A fully owned facility also would mean Tesla won't need to share its profits and technology with Chinese partners, unlike other foreign carmakers who are required to form a domestic joint venture.

Elon Musk's lawyers are fighting efforts by lawyers for investors suing Tesla to bring his girlfriend into the case.

Domestic production would help shield Tesla against import duties as the USA and China find ways to wriggle out of the tariff quandary.

China raised the import tariff on US-made cars to 40 percent in July, but cut it back to 15 percent from the start of this year as part of a ceasefire in a trade war with the United States. "All Model S/X & higher cost versions of Model 3/Y will still be built in USA for WW market, incl China", he later added, referring to the worldwide market including China. In November, they clocked 393. Stock losses in China a year ago wiped out more than US$2 trillion of wealth, denting consumer appetite for luxury goods. In October, it said it paid about US$140 million to secure more than 81ha of land for the planned Gigafactory 3.

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