Published: Tue, January 08, 2019
Markets | By Otis Pena

Tesla to produce ‘affordable versions’ of Model 3 in China this year

Tesla to produce ‘affordable versions’ of Model 3 in China this year

Tesla (TSLA) bought the land for the factory outside Shanghai in October for $140 million.

Gigafactory 3 was expected to produce around 3,000 Model 3 vehicles a week in the initial phase, ramping up to 500,000 vehicles per year when it became fully operational, Tesla said in a statement. The Shanghai plant is created to make another 500,000 cars annually-a massive step up for a company that sold fewer than 14,000 cars in China in the first nine months of 2018, according to LMC Automotive, which tracks the auto market.

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.

'We think with the resources here we can build the Shanghai Gigafactory in record time and we're looking forward to hopefully having some initial production of the Model 3 towards the end of this year and achieving volume production next year, ' Musk said at the event.

The Shanghai government last month said mayor Ying Yong had visited the site and urged Tesla to "accelerate" work on the factory.

Elon Musk joined the mayor of Shanghai on Monday for the groundbreaking ceremony of Tesla's first factory outside the USA and in the world's largest electric vehicle (EV) market, China.

A Tesla spokeswoman told AFP she was not authorised to confirm Musk's attendance or provide other details until later Monday, after the ceremony.

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Tesla broke ground on Monday for its Shanghai Gigafactory where it plans to begin making its Model 3 electric vehicles (EV) by year-end, a first step in localizing production in the world's largest auto market.

The Tesla factory, which will be built with an investment of over 50 billion yuan (USD seven billion), is the largest foreign-invested manufacturing project in Shanghai's history, state-run Xinhua news agency reported.

The Shanghai venture comes as United States companies face pressure from President Donald Trump to keep manufacturing jobs at home, and as Beijing and Washington wage a trade spat that has seen both sides levy tariffs on hundreds of billions of dollars of products.

But the pace of growth is expected to slow along with China's economy. Chief Executive Officer Elon Musk called on Chinese consumers to order their Model 3 now in an interview with a Shanghai media outlet, warning that a new local plant isn't going to make top-end versions of the sedan any cheaper.

The American automaker faces rising competition from local rivals in China. He provided no price figures for China-made cars.

"With the construction of the Shanghai factory, the faster the better (for Tesla)", Kang said.

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