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Tesla’s New Plant In China To Churn Out 500,000 Vehicles A Year

After prior dissent with the government on the matter of ownership through joint venture, Tesla and the People’s Republic of China have reached a preliminary agreement on the automaker’s second production plant. The Palo Alto-based company has been dealing with the Chinese government for more than a year now, but soon enough, the Model Y electric crossover could be well under production at a new facility in Shanghai.
Tesla's Fremont plant in California 1 photo
Photo: Tesla
In addition to vehicle production, Tesla plans to integrate a battery manufacturing facility at the site as well. Even though the automaker confirmed how the cookie crumbles in the largest of lines, Tesla didn’t disclose how much money it will invest in the Shanghai factory.

Tesla, Inc. could set precedent in the People’s Republic of China by carrying out the project without the intervention of a joint venture partner. If proven true, this development would help Tesla keep its designs, patents, and technology safe and sound. Elon Musk is wise to keep things under as much control as he can, more so if you remember how China deals in terms of intellectual property theft.

According to a statement from the American company, it will take about two years for the factory to begin producing vehicles. Another two to three years would be necessary for the Shanghai plant to hit 500,000 vehicles in yearly output. More to the point, 2020 is supposed to be the year the China-made Model Y would start rolling off the assembly line.

In addition to gaining traction in the world’s largest market for new cars, why did Tesla choose China of all the countries out there? One of the reasons is the trade war with China, which saw prices for the Model S skyrocket by more than $20,000. The main culprit here is the car import tax for U.S. vehicles, which China raised by 40 percent last week.

If you insist, the cheapest Model S available in the Middle Kingdom right now is $128,500 compared to $107,500 before the tariff went into effect. A fully-loaded Model X, meanwhile, is a mind-boggling $240,000.
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Editor's note: Tesla's Fremont plant in California pictured.

About the author: Mircea Panait
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After a 1:43 scale model of a Ferrari 250 GTO sparked Mircea's interest for cars when he was a kid, an early internship at Top Gear sealed his career path. He's most interested in muscle cars and American trucks, but he takes a passing interest in quirky kei cars as well.
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