Tesla to expand Shanghai plant

Asian Tech Press (May 5) -- Tesla Inc plans to expand its Shanghai plant, making it become "the world's largest vehicle export hub".

Tesla mentioned in a letter of thanks dated May 1 to local authorities in Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone (Lin-gang Special Area) that the company will further expand its factory in the city, people familiar with the matter said.

The letter said Tesla will build a new factory on land near its existing facility, ready to add an annual capacity of 450,000 electric vehicles, including Model 3s and Model Ys, making the gigafactory Shanghai "the world's largest vehicle export hub."

Tesla's Shanghai plant delivered 484,130 vehicles in 2021, accounting for 51.7% of its total global deliveries that year. The automaker produces its Model 3 and Model Y vehicles in the gigafactory Shanghai, which serves the Chinese market and acts as an export hub to Germany and Japan.

Numerous factories were shut down after Shanghai went into lockdown from March to combat the spread of COVID-19, including Tesla's gigafactory in the financial hub.

On April 19, Tesla resumed operations at its automotive manufacturing plant as Shanghai began to ease Covid lockdown.

The 22-day shutdown of Tesla's Shanghai plant was its longest since it started production in late 2019, resulting in an output loss of more than 50,000 vehicles, according to calculations.

Another person familiar with the matter said that Tesla has long kicked off talks with the Shanghai government on related matters, and a new factory is under preparation but has not yet been reached an agreement.

If the plan to build a second factory is true, the completion of the expansion will help Tesla to increase the total capacity of the gigafactory Shanghai to 1 million units per year.

Internal sources at Tesla responded that it is actually expanding production in Shanghai, not building a second factory in the city.

In fact, rumors continue to swirl about the location of Tesla's second factory in China.

Tesla China denied in February rumors that the company's second Chinese factory would soon be located in the country's northeastern city of Shenyang.

Last November, rumors surfaced that Tesla's second Chinese megafactory would be located in the coastal city Qingdao. However, Tesla's global vice president Grace Tao Lin confirmed that the news was untrue.

Tesla CEO Elon Musk said during a fourth-quarter earnings conference call in late January that it would scout new factory locations throughout 2022 and expects to announce the location of its fifth global megafactory by the end of this year.

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