Tesla Makes Gigafactory Breakthrough in Shanghai, Production to Start in 2019

Tesla Makes Gigafactory Breakthrough in Shanghai, Production to Start in 2019

Tesla broke ground on Monday for its Shanghai "Gigafactory" where it plans to begin making its Model 3 electric vehicles (EV) by year-end, a first step in localising production in the world's largest auto market.

The factory in Shanghai will produce "affordable versions of 3/Y for Greater China", Musk said on Twitter before the groundbreaking ceremony, adding that higher-priced models would be built in the US.

Model 3, for example, which starts at a price of Dollars 35,000 in the USA market, is sold between 500,000 yuan and 560,000 yuan (around USD 72,980 and USD 81,738) in China.

China has raised import duties on US-made cars as part of the broader trade fight with the US.

Tesla signed a preliminary agreement with the Shanghai government previous year to build the 500,000-unit factory in the Chinese city.

The so-called Gigafactory would also be China's first wholly foreign-owned auto plant, a reflection of China's broader shift to open up its vehicle market even amid a whipsawing trade war between Washington and Beijing.

China-based manufacturing will help avoid sanctions from the Chinese government amid the US-China trade war, where the US imposed 25 percent import tariffs on steel and 10 percent on aluminium, and China slapped US exports with matching retaliatory sanctions. The lower rate will last until the end of March pending trade talks.

In a recent appearance in YouTube's Autoline Network channel, Munro remarked that if Tesla optimizes the Model 3's production in China, the electric vehicle will generate a lot of profit for the company.

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She stopped the vehicle and placed her child back into the auto before driving away, a police spokesman told News Corp Australia. The incident took place at around 5:45 p.m. on Friday on the Tonkin Highway between the suburbs of Camillo and Harrisdale.

"Affordable cars must be made on same continent as customers", Musk tweeted on Monday.

Tesla's plans come as China's economy faces a slowdown - something Apple said has contributed to concerns it is going to miss its quarterly revenue target.

"And the competition is getting more and more fierce".

Tesla secured the site for its 500,000 vehicle capacity plant in October and has already begun hiring staff and starting procurement for building materials.

Tesla said in October it had signed an agreement for a 210-acre (84-hectare) site in the Lingang district in southeastern Shanghai.

"Looking forward to breaking ground on the @Tesla Shanghai Gigafactory today!" said Musk on Twitter.

Shares in Chinese suppliers to Tesla, including Tianjin Motor Dies Co Ltd and VT Industrial Technology Co Ltd, rallied on Monday after Musk's tweets. He said production would start to some degree in the second half of 2019.

China is the largest market for electric vehicles, and most forecasters predict EV sales in the country will accelerate rapidly as government regulation drives toward a goal of 100 per cent electric vehicles by 2030.