Techlife News - - SUMMARY -

Tesla Inc. broke ground this week for a fac­tory in Shang­hai, its first out­side the United States.

CEO Elon Musk said on Twit­ter that the com­pany will start pro­duc­tion in China of its Model 3 and a planned cross­over by the end of the year.

Tesla an­nounced plans in July to build the Gi­gafac­tory 3 facility in China, the big­gest elec­tric ve­hi­cle mar­ket, de­spite trade ten­sion be­tween Bei­jing and Wash­ing­ton. That fol­lowed Bei­jing’s an­nounce­ment it would end re­stric­tions this year on for­eign own­er­ship of elec­tric ve­hi­cle pro­duc­ers in an ef­fort to spur in­dus­try de­vel­op­ment.

“Look­ing for­ward to breaking ground on the @ Tesla Shang­hai Gi­gafac­tory to­day!” said Musk on Twit­ter. “Aim­ing to fin­ish ini­tial con­struc­tion this sum­mer, start Model 3 pro­duc­tion end of year & reach high vol­ume pro­duc­tion next year.”

China’s state broad­caster CCTV showed Musk and other Tesla and lo­cal of­fi­cials at­tend­ing a chilly cer­e­mony in the rain this week in Shang­hai’s out­skirts.

The Shang­hai fac­tory will pro­duce “af­ford­able ver­sions of 3/Y for greater China,” Musk said. The com­pany refers to a planned cross­over that has yet to re­ceive a for­mal name as the Y.

Higher-priced mod­els will be built in the United States for ex­port to China, Musk said.

Tesla, based on Palo Alto, Cal­i­for­nia, global au­tomak­ers in­clud­ing Gen­eral Mo­tors Co., Volk­swa­gen AG and Nis­san Mo­tor Corp. that are pour­ing bil­lions of dol­lars into man­u­fac­tur­ing elec­tric ve­hi­cles in China.

Lo­cal pro­duc­tion would elim­i­nate risks from tar­iffs and other im­port con­trols. It would help Tesla de­velop parts sup­pli­ers to sup­port ser­vice and make its ve­hi­cles more ap­peal­ing to main­stream Chi­nese buy­ers.

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

Shang­hai is a cen­ter of China’s auto in­dus­try and home to state-owned Shang­hai Au­to­mo­tive In­dus­tries Corp., the main lo­cal man­u­fac­turer for GM and VW.

Tesla has yet to give a price tag but the Shang­hai govern­ment said it would be the big­gest for­eign in­vest­ment there to date.

The com­pany faces com­pe­ti­tion from Chi­nese brands in­clud­ing BYD Auto and BAIC Group that al­ready sell tens of thou­sands of hy­brid and pure-elec­tric sedans and SUVs an­nu­ally.

Un­til now, for­eign au­tomak­ers that wanted to man­u­fac­ture in China were re­quired to work through state-owned part­ners. For­eign brands balked at bring­ing elec­tric ve­hi­cle tech­nol­ogy into China to avoid hav­ing to share it with po­ten­tial com­peti­tors.

The first of the new elec­tric mod­els be­ing de­vel­oped by global au­tomak­ers to hit the mar­ket, Nis­san’s Syl­phy Zero Emis­sion, be­gan rolling off a pro­duc­tion line in south­ern China in Au­gust.

Lower-priced elec­tric mod­els from GM, Volk­swa­gen and other global brands are due to hit the mar­ket start­ing this year, well be­fore Tesla is up and run­ning in Shang­hai.

Im­age: Ding Ting

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