Tesla launches production of Model 3 made in China

It took only ten months for Tesla to build its Gigafactory in Shanghai, the first car factory owned 100% by a foreign manufacturer. The group founded by Elon Musk relies on the Chinese market to become a mainstream brand.

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The Tesla Gigafactory in Shanghai on October 18th.
The Tesla Gigafactory in Shanghai on October 18th. Aly Song / REUTERS

Even by Chinese standards, it's fast. It took only one hundred and sixty-eight business days for Tesla to start production of its first Model 3 in Shanghai, according to the official agency China New. Just ten months after laying the foundation stone of its second Gigafactory in the world, the US leader of the luxury electric car released, Thursday, October 24, the first photos of its production lines in activity. A success for Tesla's founder, Elon Musk, accustomed to ambitious promises … and disappointments.

This time, the delivery took place two months before the end of the year, date promised by the boss. The announcement of the launch of production before the time and the publication of good results in the third quarter boosted the share of Tesla by 17.5% Nasdaq Thursday. Musk says production will reach 1,000 vehicles a week by the New Year, a goal his US plant had taken months to reach.

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Despite taxes of 25% on imports, China is already the second largest market in the world for the manufacturer. The builder will no longer have to pay these taxes. In addition, it will save on the cost of transporting vehicles, which will reduce sales prices. Tesla announced that its locally produced Model 3 will be sold 328,000 yuan (41,700 euros), 36,000 yuan less than the current price. Enough to win new customers, in the country that has pushed the most electrification of the fleet in recent years, thanks to generous subsidies and benefits for this type of vehicle, such as escaping from auctions or lotteries to get a license plate.

$ 2 billion investment

In 2018, the Chinese bought 1.2 million electric vehicles, more than half of those sold in the world. But the wind turns: sales have been falling for three months. Tesla, however, has reason to hope. For now, it is the luxury brands that best hold the shock in a sluggish Chinese market. Eventually, the American firm hopes that China will be the first market of its Model 3.

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The Shanghai plant, which required 2 billion dollars (1.8 billion euros) investment, is the first foreign factory for the US group. It is also the first car factory owned 100% by a foreign manufacturer. Until now, they were forced to partner with Chinese companies in half-owned joint ventures to foster the development of the local industry. Beijing announced the end of these rules in the spring of 2018, in an attempt at appeasement, as the trade war with the United States began.


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