Tesla delivers its first made-in-China electric car
Tesla delivered its first China-built cars, a milestone for Elon Musk’s company as it accelerates a push in the world’s largest electric-vehicle market.
The company handed over the first 15 Model 3 cars assembled at Tesla’s new multibillion-dollar Shanghai plant — its first outside the US — to company employees at the facility.
More workers will receive vehicles over the next couple of days, and deliveries to customers will start in January, company officials said at the ceremony.
The Chinese plant represents a cornerstone of the chief executive’s plans to make Tesla a truly global carmaker.
The company last month announced plans to build a factory in Germany to cater to burgeoning European demand for electric cars.
The China plant could also help Mr Musk build on recent momentum for the company in the world’s largest market both for electric vehicles and cars in general. The Model 3 will compete with electric cars from local contenders such as NIO and Xpeng Motors, as well as global manufacturers including BMW and Daimler.
Demand for the locally built Model 3 is very good, and Tesla is confident it will sell all vehicles manufactured at the site, Allan Wang, general manager of Tesla China, said at the plant. “Our aim is to kill all internal-combustion engine cars,” he said.
While deliveries to customers haven’t started, the milestone caps several months of wins for Mr Musk. The latest came last week, when the locally built car was included on a list of vehicles qualifying for an exemption from a 10% purchase tax in China.
The plant is now producing more than 1,000 cars a week, and aims to double the rate over the next year, said Song Gang, the factory’s manufacturing director. That means the facility has met a prediction Mr Musk made in April.
Tesla’s original and for long its only car factory in Fremont, California, spent months trying to hit a 1,000 weekly rate. Mr Musk has said a weekly rate of 3,000 in Shanghai is a target at some point.
The German manufacturing base near Berlin will allow Tesla to better challenge its European premium rivals on their backyard.
Mr Musk estimated this year that its so-called European gigafactory probably won’t be operational until 2021.
Shares of Tesla have surged since the carmaker reported a surprise profit, and are now more than double their year low in June.
The Shanghai gigafactory broke ground at the start of this year. Originally just a muddy plot about a 90-minute drive away from Shanghai’s city centre, it is now a crucial test of Mr Musk’s bid to keep his carmaker profitable as he bets big on Chinese appetite for electric cars. With Tesla’s volatile stock price and strained finances, investors will be watching closely how the ramp-up unfolds.
The multibillion-dollar investment will be a deciding factor to determine if Tesla will be able to take on local competitors and fend off challenges by the likes of Mercedes-Benz, BMW, and Audi. As part of its China expansion, Tesla plans to add dozens of locations in the country over the next year for showcasing its vehicles and providing charging and other services, said Xue Juncheng, director of China after-sales, at the ceremony.
Tesla said in October the locally built Model 3 will be priced from about €44,720.
On top of November’s tax exemption, the China-built model this month qualified for a government subsidy of about €3,220 per vehicle.
The company may lower the price of the locally assembled cars by 20% or more next year as it starts using more local components and reduces costs, people familiar with the matter have said.
