Tesla Is to Begin Manufacturing Electric Vehicles in China

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by Christopher Hamman · 3 min read
Tesla Is to Begin Manufacturing Electric Vehicles in China
Photo: Tesla / Twitter

The Chinese authorities have given approval to Tesla to begin manufacturing electric vehicles locally.

We all know how the Chinese are very protective of their domestic economy and how they don’t let anybody come and just set up a business within their borders for domestic consumption without strict controls. Tesla seems to have been able to jump through all the hoops and regulatory processes required to be able to manufacture electric vehicles in China sources indicate.

In what seems to be a first for China, this is the first time that the government will be allowing the establishment of a wholly foreign-owned factory on Chinese soil. In response to the slowing economy and the rise for the demand for electric vehicles, this is seen as a significant shift as the Chinese are opening up their internal economy so that new entrants will be able to come into the market that is made up of nearly a fifth of the World’s population.

The Electric car manufacturer was included in the government-approved list of automotive manufacturers as it gained Governmental approval which came with the certificate it needs to go ahead with manufacturing in the country. The list was released by the Ministry of Industry and Information Technology. Tesla intends to begin operations at its Shanghai factory by the end of the year. He carmaker indicated this in a quarterly earnings letter to its shareholders.

The Automotive manufacturer indicated at the time that equipment was moved into the factory to make ready for the first round of manufacturing. The company also indicated that all factors considered the production capacity globally is expected to be over 500,000 vehicles in the manufacturing year by the end of June 2020. Also, the Shanghai production line will have a production capacity of 150,000 cars annually.

The company also indicated that the production of the “cost-effective” version of model 3 will also begin at the Shanghai facility. Sources indicate that Tesla has also given a clear signal that this second generation model 3 will be cheaper by at least 50% of the others at the Nevada and California Gigafactories.

This move made by tesla indicates that the electric car vehicle race is indeed heating up. Recently, Volvo cars has introduced the recharge line of electric vehicles with the first XC240 Recharge. With Volvo’s grip on European markets, it will create some sort of friendly competition to see who will dominate the Chinese market which is easily the largest in the world for anything. Already this strategic move puts Tesla firmly in place as the World leader in electric vehicle manufacturing while other carmakers are scrambling to keep up with the pace of the new upstart that has taken the global automotive industry by storm.

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