Tesla puts a brake on Shanghai land purchase as US-China pressure gauges: Report

Tesla

Tesla reportedly stopped buying land in Shanghai due to rising tensions between China and the United States. Tesla Says Sino-US Tensions Will Halt Plans to Buy Land in Shanghai

People familiar with the matter said that due to uncertainty caused by tensions between China and the United States, US electric car maker Tesla suspended plans to buy land to expand its Shanghai plant and turn it into a global export hub. The importation of electric vehicles from China imposes a tariff of 25%. 

Two of the four said that after former President Donald Trump is still imposing measures on existing dams, Tesla now intends to limit Chinese production globally. Proportion in production. Tesla had previously considered expanding its exports of entry-level products made in China. Sources told Reuters that Tesla has now shipped the Tier 3 Model 3 to more markets, including the United States. 

Tesla is currently shipping the European-made Model 3 to Europe and is setting up a factory in Germany. Tesla’s Shanghai plant is designed to produce 500,000 vehicles per year, and currently produces Model 3 and Model Y vehicles at a rate of 450,000 per year. In March, Tesla avoided making offers from three people familiar with the matter. 

It was no longer aimed at substantially increasing China’s production capacity – at least for now, the factory declined to be named because the discussions are private. In a statement to Reuters, Tesla stated that its Shanghai factory, the Shanghai government is the main supporter of the establishment of a wholly-owned factory in China by Tesla. This is the first and only one in Shanghai that does not require a joint venture. For foreign passenger car factories, the Shanghai government did not respond to this. 

Tesla has never announced its intention to acquire this land, which is only half of the 200 acres (80 hectares) of land where the current Tesla facility is located. This will allow the company to increase its production capacity by another 200,000 to 300,000. 

According to a source, despite consumer disputes over product safety and review of its data processing methods, Tesla’s regulatory pressure in China continues to mount, but Tesla’s sales in China continue to rise, creating 30 billion US dollars (approximately 13.5 billion rupees RMB). In the first three months of this year, revenue in China reached Rs 22 billion, more than three times that of the same period last year, and accounted for 30% of total revenue.

The land plan is led by various CEOs Elon Musk. Tesla is known for changing its strategy (even in China). Construction documents posted on the government website in March show that Tesla is transforming its Shanghai plant to increase production capacity. 

Tesla still has land for production, but it is now used for parking at its Shanghai site. A person familiar with the matter said that Tesla can expand the capacity of its existing sites to more than 500,000. Another said Tesla could get more land for more car production lines in the future; In addition, Tesla is building facilities to repair and duplicate key components such as electric motors and battery cells at a factory in Shanghai, and manufacturing electric vehicle chargers. 

A person with direct knowledge of the matter said Tesla is increasingly competing in China with domestic companies like Nio, which is considering another way to produce products for the mass market. 

Even before the trade war tariffs, few cars made in China were shipped to the United States. General Motors sells its Chinese-made Buick Envision in the United States but has to pay an additional 25% duty, even though the SUV is not a mass-produced model.

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