Tesla Plans to Build New Plant Near Giga Shanghai to Make 450,000 More EVs Per Year

Giga Shanghai stayed closed for 22 days due to Chinese policies to fight the global pandemic. Apparently, it only managed to reopen thanks to Shanghai's efforts to convince China’s central government that it was possible. That’s what the company thanked local officials for in a letter that Reuters could see. However, the leading news there were plans to open a new factory in the city.
Tesla told Shanghai authorities it wants to build a second factory close to Giga Shanghai 8 photos
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According to Reuters, Tesla committed to erecting a new plant on nearby land close to Giga Shanghai. This second factory would be able to add 450,000 more EVs to Tesla’s production capacity every year. In 2021, Giga Shanghai produced more than 480,000. Reuters mentioned that production will include the Model 3 and Model Y, which are the only choices Tesla has in the high-volume segment. Unless Tesla is building this new factory to make a new car, that was a given.

The EV maker would be planning to turn the complex into "the world's largest vehicle export hub." We should just ask which countries the EV maker is planning to export these EVs to – India recently said that having Chinese cars was not “a good proposition.” The Indian government had hopes that Tesla would make its electric cars locally. With the new Chinese factory announcement, that seems either a distant possibility or even one that is not going to happen.

Meanwhile, Indian customers who reserved a Model 3 since 2016 are still waiting for a refund of the $1,000 they paid to be on the waiting list. Some of them framed what Tesla did as a scam after waiting all those years for a car or their money back and getting none of them.

When the added capacity is in place, Tesla may either increase sales volumes in the countries where it already sells its cars or expand its sales network to other regions, such as Latin America. To have a more comprehensive presence there, Tesla would better have more affordable vehicles to offer, which reinforces the idea that the investment may refer to the car below the Model 3 that the company said it would design and develop in China.

It was erroneously called Model 2, something Elon Musk personally denied because the Model 3 was not even supposed to be called 3: the original plan was to name it Model E. It was not possible because Ford had the trademark and decided to use it to christen its electric car division. This affordable EV would make the new Chinese plant make more sense than just expanding production of the Model 3 and Model Y. To be honest, it could even make 450,000 units seem conservative.


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