By on December 6, 2018

The city of Shanghai claims Tesla could begin production in China in the second half of 2019, which would be an incredible achievement for the automaker. China is Tesla’s biggest market after the United States and assembling product within its borders would be a good way to avoid the nation’s aggressive tariffs on U.S autos, which currently stand at 40 percent.

However, the trade war between the two countries has also stifled sales — and not just for Tesla. China’s car market hasn’t been particularly robust this year and appears to be headed for the first major slump after nearly two decades of reliable growth. While President Trump has teased that the People’s Republic may be about to lower its automotive trade barriers with America, there’s no assurances coming from Asia. Regardless, setting up shop within China should be beneficial for Tesla’s bottom line and make it more competitive with Chinese EV brands like BYD and Nio. 

In October, Elon Musk said that Tesla was endeavoring to start production of the Model 3 in China sometime next year, though many felt the new facility wouldn’t be completed by then. The automaker’s Gigafactory 3 was only approved by the Shanghai regional government in July, leaving Tesla roughly one year to hit its proposed production start date. That’s ambitious, especially considering the 210 acre plot represents the largest foreign-invested manufacturing project in the region to date.

However, Bloomberg recently reported that the company has already started advertising job openings for the new facility; the city’s mayor, Ying Yong, says everything is progressing smoothly and encouraged Tesla to accelerate construction.

Despite China’s weak-looking automotive market, EVs fared much better than internal combustion cars this year, thanks largely to the government incentivizing their purchase. China wants to see 7 million electric vehicle sales per year by 2025. To do this, the country offers support to hundreds of burgeoning EV manufacturers to help flood the market with their wares.

The South China Morning Post reports that the site for Gigafactory 3 will been completely leveled by the time Mayor Ying Yong is scheduled his visit this week. Shanghai Baoye Group, a China Minmetals subsidiary, is preparing for the delivery of a large amount of concrete pipe piles for the second half of December. That still leaves a lot to do before the factory is complete, perhaps more than can be done in a year’s time. However, Shanghai seems eager to see the facility reach completion. Tesla has yet to revise its production timeline.

[Image: Cchana/Flickr (CC BY-SA 2.0)]

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12 Comments on “Tesla Could Be Building Cars In China By 2019, According to Shanghai...”

  • avatar
    Master Baiter

    Fake news alert. I don’t care for headlines containing the word “could.” A few examples,

    Earth’s temperatures could rise by 5°C by 2100.

    Robert Muller’s investigation could find evidence of Donald Trump colluding with Russia to throw the election.

    I could be banging Scarlett Johansson next year.

  • avatar

    The author failed to use his “Elon time” calculator.

  • avatar

    Maybe by being 6000 miles from Muskville, the China plant will be able to sneak in stuff like the Toyota Production System and turn out some better quality cars.

  • avatar

    I must be crazy. The local Tesla’s off-site parking lot is closing on 300, along with the loaded dealer lot.

    What’s the term, “production constrained”? If you want a MS, a MX, or a loaded to the gills Model 3, they have your car.

    If I’m 3000 miles away from the factory, I seriously doubt this is a unique situation. If they’re rolling out in the EU, per their press releases, that’s gonna be one hell of a balancing act to keep suppliers paid. Everyone seemed to think Q3 profitability was so important – it’s going to be funny listening to “burst rates” and the other nonsensical metrics they come up with. I’ll go out on a limb and propose they’ve pretty well cleared out the high-margin US deposits so it will be very interesting to see how they can go all-in with the EU deliveries and keep the $$ rolling in to bring the China factory to a point where they are shipping product in late 2019. Feel free to mark your calendar and bash me when they’re hitting “burst production” of 10k for one day out of the month.

  • avatar

    Tesla’s BEVs are utter crap. The Chinese specialize in manufacturing utter crap. This must be a match made in heaven.

  • avatar

    Wait. 40 percent tariff on U.S. cars? I thought it was only the Trump administration putting on the tariffs ( if you just read the major media outlets).

    Anyway, that needs to go away.

    • 0 avatar

      Ahhh, yes, the fake news media outlets. Where can we go these days to get the real news?

      • 0 avatar

        No mention of China’s 40 percent tariffs on autos in this obviously very smart and unbiased tariff expert’s editorial. Are you sure that’s right?

        Anyway I go to Real Clear Politics. A lot of good articles there on both sides.

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