New Shanghai factory could double Tesla production to 1 million units per year

Reports suggest Tesla is mulling another assembly line in Shanghai. The second factory in China, following the already-operating Gigafactory 3, is expected to be set up in the Lingang free-trade zone, which is not so far from the existing facility. It comes after Tesla was reported to be planning to invest CNY1.2 billion (SGD 258 million) to ramp up production in Shanghai. The American EV giant also said it will employ another 4,000 workers to expand production.

With the new Shanghai unit, Tesla is aiming at an annual production of around two million vehicles in the Chinese city. However, while the target of two million units a year seems far-fetched, for now, the new facility is expected to at least double the current production in Shanghai to one million Tesla EVs every year.

The Gigafactory 3, which commenced local deliveries in 2020, has an annual production capacity of 450,000 units. Tesla China reported as many as 484,130 vehicle deliveries in 2021, which was more than half of the 936,000 units Tesla sold worldwide throughout the year. Tesla registered 321,000 Model 3 and Model Y sales in mainland China in 2021. The rest of the 160,000 Shanghai-made Teslas were exported to other markets like Japan and Germany. Furthermore, Tesla said its revenue doubled to USD 13.8 billion (SGD 18.7 billion) revenue in China in 2021. The American EV giant also confirmed that the Shanghai plant had surpassed its Fremont, California factory in terms of output.

Plans for a new Tesla factory in China are backed by increasing EV demand in the country. In 2021, as many as 2.99 million new-energy vehicles (NEV), up by 169% year-on-year, were sold across China. For the unacquainted, NEV includes pure Electric Vehicles (EVs), plug-in hybrids, and fuel-cell vehicles.NEV sales are expected to surge by another 84% in 2022 to top 5.5 million units, the China Passenger Car Association predicted.

Neither Tesla nor the Shanghai city government responded to a request for comment on the new Tesla plant in the city. However, it was revealed in a recent regulatory filing with Shanghai earlier this week that Tesla is planning to expand parts production at its Shanghai factory. The filling included hiring additional workers and running its factory for longer in a day, all to meet the growing demand for its EVs.

Source: Reuters

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