Meghana KandraTesla signs a one-year deal with Hyundai Glovis worth $422 million. This deal makes Hyundai Glovis sign its largest contract with a single automaker. The deal is that the South Korean logistics company will transport vehicles from the Tesla factory in China to other locations.
Image credits- Asia Tech News
Tesla has been using Gigafactory Shanghai, located on the southern shores of the Shanghai coast, as an export hub for its vehicles for the majority of 2021. Prior to this year, Tesla maintained that it would not use Shanghai-produced vehicles as supplementary inventory for other markets. However, the company reversed its stance on the idea at the beginning of the new year, beginning its export program by shipping 7,000 Model 3s to Europe straight from Shanghai. It would be the first of many shipments from China to other markets.
Elon Musk, Tesla CEO, said in September, detailing the strategy the automaker uses for its Shanghai export operation, “Giga Shanghai makes cars for export in the first half of quarter, then cars for far away parts of China, then cars for nearby parts of China. The net result is a crazy wave of deliveries end of the quarter. It is tough on our team, so we’re hoping to reduce the wave in Q4 & Q1.”
Logistic nightmare
Some analysts are not keen on Tesla’s export strategy. Tesla bull and longtime analyst Dan Ives once called the Giga Shanghai export operation “a logistical nightmare,” adding that the non-sustainable plan is “pushing back delivery times for customers throughout the region.”
TradeWinds initially reported the partnership. It is a site that tracks global shipments. The site stated that it is the largest contract Hyundai Glovis has signed with a single carmaker in its thirteen-year history in the sector. Hyundai Glovis has three shipping processes, including- Overseas Shipment for Finished Vehicle/Breakbulk, Bulk Export, and Import, and RO-RO Terminal Operation,
“Using PCTC (pure car and truck carrier: carriers for complete vehicles), we are transporting heavy machines for construction, buses, and electric locomotives to expand the importance of 3PL (third-party logistics) based on efficient cooperation between headquarters and overseas branches. We are developing many new courses and expanding existing ones to cover the entire world for maximizing customer satisfaction.”
It is known that the vehicles will be shipped to Europe, but unclear whether China-built vehicles will be shipped to the US. Despite Giga Berlin’s starting production, it is expected to start with Model Y production, leaving Giga Shanghai to export Model 3 vehicles in the European region. Some predict that some Model 3 vehicles will also reach the United States.
Credits- Teslarati