Tesla will build fac­tory in Shang­hai

China Daily (USA) - - FRONT PAGE - By WANG YING and HE WEI in Shang­hai Con­tact the writ­ers at wang_y­ing@chi­nadaily.com.cn

Af­ter elec­tric ve­hi­cle maker Tesla Inc an­nounced its first fac­tory out­side the United States in Shang­hai on Tues­day, it be­came China’s first wholly for­eign-owned au­tomaker, and the pro­ject is the largest ever for­eign man­u­fac­tur­ing in­vest­ment in Shang­hai.

The Gi­gafac­tory, with a pro­jected an­nual ca­pac­ity of 500,000 ve­hi­cles, comes af­ter China ended re­stric­tions in April re­quir­ing for­eign au­tomak­ers to work through lo­cal part­ners.

“The Na­tional De­vel­op­ment and Re­form Com­mis­sion an­nounced ear­lier this year that China will scrap for­eign in­vest­ment lim­its for car­mak­ers that man­u­fac­ture fully elec­tric and plug-in hy­brid ve­hi­cles, so the es­tab­lish­ment of Tesla’s fac­tory is un­der­stand­able as it is en­cour­aged by the govern­ment,” said Aaron Guo, as­so­ciate di­rec­tor of re­search at Min­tel.

Ac­cord­ing to Guo, af­ter grow­ing to be­come the world’s largest new en­ergy car mar­ket since 2016, China’s de­mand for clean en­ergy ve­hi­cles has been es­ca­lat­ing. An­nual sales of new en­ergy cars are ex­pected to reach 838,000 ve­hi­cles this year, and ex­ceed 1 mil­lion ve­hi­cles in 2019.

Ac­cord­ing to the agree­ment signed by Tesla and the Shang­hai mu­nic­i­pal govern­ment, Tesla will set up a sub­sidiary com­bin­ing re­search and de­vel­op­ment, man­u­fac­tur­ing, sales, and an elec­tronic ve­hi­cle in­no­va­tion cen­ter for R&D.

Tesla Chair­man Elon Musk and Shang­hai Mayor Ying Yong at­tended the agree­ment sign­ing cer­e­mony on Tues­day.

Such plan­ning is in line with Shang­hai’s goal of de­vel­op­ing high­end man­u­fac­tur­ing and be­com­ing a world-class au­to­mo­tive in­dus­trial cen­ter, an­a­lysts said.

“Shang­hai has risen to be­come the world’s top city in terms of new en­ergy car ap­pli­ca­tion,” said Zhu Ming, deputy chief of the Shang­hai Mu­nic­i­pal Bureau of Qual­ity and Tech­ni­cal Su­per­vi­sion.

The an­nounce­ment of the fac­tory was also on the same date that Shang­hai rolled out the de­tails of a 100 poli­cies on fur­ther open­ing-up, which en­cour­age for­eign in­vest­ment in ad­vanced man­u­fac­tur­ing, in­clud­ing for­eign-funded new en­ergy au­to­mo­tive projects.

“Tesla’s en­try to China is an in­di­ca­tion of deep­ened open­ing-up in the au­to­mo­bile in­dus­try and be­yond,” said Cang Xue­jun, vi­cepres­i­dent of Shang­hai Mo­tor Ve­hi­cle In­spec­tion Cer­ti­fi­ca­tion and Tech­nol­ogy In­no­va­tion Cen­ter.

LONG WEI / FOR CHINA DAILY

A Tesla Model 3 is dis­played dur­ing an auto show in Bei­jing.

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