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Tesla to open a plant in Shanghai for production of 500000 cars

11 July, 2018

Tesla’s chief executive officer Elon Musk on Tuesday confirmed a deal with Chinese authorities to contrast a new auto plant in Shanghai.

Tesla has planned to produce the first cars after two years of the construction of its Shanghai factory reaching an approx. number of about 500,000 vehicles after two or three years.

This data will help Tesla increase its annual production in comparison to other companies that only produce around 200,000 to 300,000 vehicles annually.

“I am sure that Tesla needs fresh money at the latest next year,” Frank Schwope, an analyst said.

China is considered to be the largest market for electric vehicles and Tesla’s investment in this country will accelerate the sales of electric vehicles rapidly. These vehicles are believed to reduce the pollution as well as manufacture cost.

The big challenge for Tesla is to compete against rival companies like BMW, Volkswagen and others that have already placed their eyes on China’s share market for production of futuristic electric vehicles.

According to the stats for 2017, around 28 million vehicles were sold in China last year and this is assumed to top at around 35 million by 2025.

‘The Shanghai plant will certainly improve Tesla’s positioning in China and allow it to locally produce and avoid import tariffs. The relaxation of the 50/50 rule for JVs in China uniquely benefits Tesla because they did not have an existing JV in China’ Tasha Keeney, an analyst said.

 

 

(Image source:- teslarati.com)

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