In Shanghai, right next to the existing Gigafactory 3, Tesla is building its second assembly line which will be able to manufacture 450,000 additional vehicles each year. This new production line will allow the manufacture of Model 3 and Model Y.
Tesla puts on the Chinese market
A few days ago, Tesla managed to negotiate with the Chinese authorities to restart production at its Gigafactory in Shanghai. Closed due to lockdown the factory suffers a production loss of 50,000 units. Moreover, to make up for lost time, the American manufacturer forces its employees to sleep at the factory. Indeed, Tesla has distributed sleeping bags and mattresses to its employees, so that they stay on site at night. They are forced to sleep on the floor. An obligation of their employer to compensate for this drop in production.
United States: $3 billion to improve battery production
Beijing’s zero covid policy does not seem to cool Tesla, however. The manufacturer is building a second production line in Shanghai. This new assembly line will have an annual capacity of 450,000 units. The assembly line will be part of Gigafactory 3, which started producing electric vehicles at the end of 2019. With this project, Tesla is looking to double its production capacity in China. In 2021, the Chinese Gigafactory produced 484,130 Model 3 and Model Y vehicles in 2021, i.e. 51.7% of its worldwide production of 936,000 units.
321,000 vehicles delivered in China in 2021
In China, 321,000 Model 3 and Model Y vehicles were delivered to customers last year, 117% more than in 2020. Elon Musk is confident that this market is very promising. The remaining 163,130 cars were exported to Tesla’s main markets, such as Germany and Japan. Chen Jinzhu, CEO of Shanghai Mingliang Auto Service, a consulting firm, believes that in “Adding a new assembly line, Tesla’s ultimate goal is to boost production capacity in Shanghai to 2 million units per year. It’s only a matter of time before Elon Musk’s company achieves that goal.”.
A detail that is important: the Shanghai Gigafactory is the only automobile manufacturing company in China entirely owned by a foreign investor. Beijing hopes that Tesla’s activities on the mainland will ultimately bolster its ambitions to become a global leader in electric cars. Tesla said in a recent statement that the Chinese administration gave him considerable support in the resumption of production by helping him bring 6,000 workers to the factory and carry out preventive measures within the Gigafactory.