Elon Musk breaks ground on first Tesla fac­tory out­side US

The Malta Business Weekly - - INTERNATIONAL -

Tesla boss Elon Musk has bro­ken ground at a new fac­tory in Shang­hai, the elec­tric car­maker's first man­u­fac­tur­ing plant out­side the US.

The fa­cil­ity will pro­duce Model 3 and Model Y cars as it pushes to grow its pres­ence in the world's largest car mar­ket.

The Amer­i­can au­tomaker faces ris­ing com­pe­ti­tion from lo­cal ri­vals in China.

But the new fac­tory would help Tesla avoid US tar­iffs on car im­ports into the coun­try.

In a se­ries of tweets on Mon­day, Mr Musk said plant would build "af­ford­able ver­sions" of the Tesla Model 3 - the car­maker's mass mar­ket ve­hi­cle - and its pro­posed Model Y for the Greater China re­gion.

He said the so-called Gi­gafac­tory - which could cost as much as $5bn ac­cord­ing to re­ports - would start Model 3 pro­duc­tion at the end of year.

"Aim­ing to fin­ish ini­tial con­struc­tion this sum­mer, start Model 3 pro­duc­tion end of year [and] reach high vol­ume pro­duc­tion next year" the en­tre­pre­neur tweeted.

The push into China comes amid sim­mer­ing trade ten­sions be­tween Bei­jing and Wash­ing­ton.

US car­mak­ers have been vo­cal crit­ics of Pres­i­dent Don­ald Trump's tar­iffs, which have tar­geted the car sec­tor among oth­ers.

In Oc­to­ber, Tesla warned that tar­iffs in China were cre­at­ing chal­lenges.

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

At the time, Tesla said the costs that go into its cars are roughly 55% to 60% higher than for lo­cal firms, when tar­iffs and sea trans­port costs are take into ac­count.

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