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)]