Tesla starts building its huge Shanghai factory to make cars for China

Tesla's new manufacturing plant in China is officially under construction.CEO Elon Musk broke ground ...

Posted: Jan 7, 2019 12:17 PM
Updated: Jan 7, 2019 12:17 PM

Tesla's new manufacturing plant in China is officially under construction.

CEO Elon Musk broke ground on the electric carmaker's huge factory in Shanghai on Monday, kickstarting a plan to eventually make half a million vehicles in China every year.

Asia

Business figures

Business, economy and trade

China

Companies

Continents and regions

East Asia

Elon Musk

International trade

North America

Tesla Inc

The Americas

Trade and development

United States

Automakers and manufacturing

Automotive industry

Business and industry sectors

Company activities and management

Company locations and facilities

East China

Manufacturing and engineering

Manufacturing facilities

Manufacturing industry

Shanghai

The company is aiming to complete the initial construction work this summer and start producing its cheapest car, the Model 3, by the end of the year, Musk said in a series of tweets before the event.

The Gigafactory in Shanghai's Lingang Industrial Zone is the biggest foreign investment in manufacturing the city has ever seen, the Shanghai government said in a statement Monday. The government also reiterated Tesla's initial target to make 250,000 cars a year, eventually ramping up to 500,000. That's about five times the number of vehicles the company currently produces in the United States.

The factory, Tesla's first outside the United States, will produce "affordable versions" of the Model 3 and its yet-to-be-unveiled Model Y crossover for customers in China, Musk tweeted on Monday.

Pricier versions of the two cars, as well as Tesla's other vehicles such as the Model S and Model X, will still be produced in the United States for global markets including China, he added.

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

Winding road ahead

Tesla (TSLA) is forging ahead in China at a tricky time for both the company and the country.

China's slowing economy and its trade war with the United States have hit the auto industry hard, with companies including General Motors (GM), Ford (F), Jaguar Land Rover and Volkswagen (VLKAF) all reporting a slide in sales recently.

Tesla's own prices in China have fluctuated wildly, with the company slashing prices several times last year even after China increased tariffs on imported US vehicles.

"We are absorbing a significant part of the tariff to help make our cars more affordable for customers in China," a company spokesperson told CNN in November.

Those tariffs have since been temporarily reduced, as China and the United States try to hammer out a trade deal.

Tesla has also been forced to drop its US prices by $2,000, as the federal tax credit granted to its buyers gradually gets reduced and phased out. The price cut could lead to a decline of about $180 million in revenue every quarter, based on Tesla's fourth-quarter sales.

The carmaker will be hoping to make up some of that revenue by producing vehicles in China, allowing it to reduce prices further and compete with homegrown companies such as Nio (NIO) and BYD (BYDDY).

Monday's announcement about the Shanghai factory "tells me that the additional pressure from the slowdown in the market has internal forecasts for Tesla China sales decreasing pretty substantially," said Tu Le, founder of research firm Sino Auto Insights.

"A Tesla vehicle that can compete on price is a gamechanger for China and could be a huge headache for all the China EV startups that plan to launch in the next 18 months," he added.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 313166

Reported Deaths: 7228
CountyCasesDeaths
DeSoto21496257
Hinds20294414
Harrison17814309
Rankin13573278
Jackson13411246
Madison10066217
Lee9962173
Jones8364163
Forrest7649152
Lauderdale7181240
Lowndes6370145
Lamar621686
Lafayette6171118
Washington5323133
Bolivar4797132
Oktibbeha461498
Panola4561105
Pearl River4499145
Marshall4397103
Warren4380121
Pontotoc419572
Monroe4100133
Union409076
Neshoba4026176
Lincoln3950110
Hancock377786
Leflore3487125
Sunflower335790
Tate332484
Pike3301105
Scott315373
Alcorn311968
Yazoo310769
Itawamba299477
Copiah296465
Simpson294788
Coahoma294379
Tippah287768
Prentiss279560
Adams269582
Marion268880
Leake266273
Wayne262341
Grenada260386
Covington256381
George246848
Newton246061
Winston226881
Tishomingo225967
Jasper220848
Attala214173
Chickasaw207157
Holmes188673
Clay184754
Stone182033
Tallahatchie178140
Clarke177879
Calhoun170132
Yalobusha163337
Smith162234
Walthall133845
Greene130333
Lawrence128323
Montgomery126742
Noxubee126734
Perry125938
Amite122842
Carroll121728
Webster114532
Jefferson Davis106932
Tunica104826
Claiborne102230
Benton99125
Humphreys96133
Kemper95428
Franklin83623
Quitman80216
Choctaw76118
Wilkinson66930
Jefferson65428
Sharkey50317
Issaquena1686
Unassigned00

Alabama Coronavirus Cases

Cases: 530988

Reported Deaths: 10978
CountyCasesDeaths
Jefferson765291522
Mobile40971804
Madison34751503
Tuscaloosa25775452
Montgomery24329589
Shelby23431249
Baldwin21131308
Lee15884171
Calhoun14501314
Morgan14293279
Etowah13831353
Marshall12222223
Houston10567281
Elmore10061205
Limestone9960151
Cullman9664193
St. Clair9655243
Lauderdale9424241
DeKalb8830186
Talladega8223176
Walker7235277
Autauga6920108
Jackson6810112
Blount6660137
Colbert6298134
Coffee5511119
Dale4831111
Russell441138
Chilton4290112
Franklin425782
Covington4121118
Tallapoosa4027152
Escambia393376
Chambers3563123
Dallas3551151
Clarke351061
Marion3118101
Pike310877
Lawrence300298
Winston274472
Bibb260764
Geneva249977
Marengo249764
Pickens234461
Barbour230857
Hale222977
Butler215969
Fayette212362
Henry188744
Cherokee184845
Randolph180241
Monroe177440
Washington167339
Macon159150
Clay156256
Crenshaw152257
Cleburne148941
Lamar142535
Lowndes138853
Wilcox127130
Bullock123041
Conecuh110529
Perry107726
Coosa107228
Sumter104532
Greene92334
Choctaw60624
Out of AL00
Unassigned00
Tupelo
Cloudy
59° wxIcon
Hi: 65° Lo: 57°
Feels Like: 59°
Columbus
Cloudy
60° wxIcon
Hi: 66° Lo: 61°
Feels Like: 60°
Oxford
Cloudy
54° wxIcon
Hi: 65° Lo: 53°
Feels Like: 54°
Starkville
Cloudy
57° wxIcon
Hi: 65° Lo: 58°
Feels Like: 57°
A frontal system to the south of our area will linger for a few more days. This lingering will linger some more chances for some showers and thunderstorms in our weather forecast over the next few days.
WTVA Radar
WTVA Temperatures
WTVA Severe Weather