Reports from the Heart of the Machine
Editing: Maynon, Zenan
Tesla's gigafactory in Shanghai produces more than 7 percent of the world's new energy vehicles, and now Tesla wants to multiply its capacity by four.
Two people familiar with the matter told Reuters that Tesla plans to open a new factory in Shanghai as early as next month to double its production capacity to meet the growing demand for Tesla vehicles in the Chinese market and export markets.
According to people familiar with the matter, once the new plant is fully operational, Tesla's expanded Shanghai factory will be able to produce up to 2 million cars per year.
The new plant will be located near Tesla's Shanghai production site, namely Lingang in Pudong New Area. Tesla declined to comment.
In November last year, the second phase of Tesla's Shanghai plant optimization project had just been publicized in an environmental impact assessment, with a total investment of 1.2 billion yuan, and was expected to be completed in April this year.
If the expansion plan is implemented, Tesla's production capacity in electric vehicles will be comparable to that of other mature brands in the Chinese market as the leader in the global electric vehicle market.
By comparison, Toyota produced 1.6 million vehicles in China in 2021, and GM and its main Chinese partner SAIC motor produced a total of 1.4 million vehicles.
At present, the budget and completion timeline of the expansion plan are unknown. But if you look at it from the past cycle, Tesla began to produce the Model 3 and Model Y , two of Tesla's main models, within a year after the Shanghai factory broke ground.
Tesla electric vehicles are currently being produced at the Lingang Gigafactory in Fremont, California, and Shanghai, while the high-end models Model X and Model S are only produced in Fremont. The Shanghai factory is an important factor in Tesla's rapid increase in production capacity and market leadership.
Tesla's first European factory, the Gigafactory in Brandenburg, Germany, has been slow to build due to environmental impact assessments and other reasons. Tesla executives said the machines at the German factory had been installed and had been in trial production since the end of last year, but the plant could not increase production and sell its vehicles because it did not have a commercial operating permit.
Two sources familiar with the expansion plan told Reuters that the expansion plan of the existing factory puts Tesla on track to produce about 1 million cars this year, though one of the sources said it would also depend on the supply of parts.
One of the sources said Tesla plans to increase its weekly production to 22,000 units in the coming months, or 1.1 million units a year. That's more than double the planned capacity of the Shanghai plant.
Shanghai has been supporting Tesla's wholly-owned factory in China, and it is also the first foreign auto factory that does not need to be jointly invested with Chinese companies.
In an environmental impact assessment report submitted earlier this week on the first phase of Tesla's Gigafactory Project (Phase I) - Parts Production Process Improvement Project (Capacity Adjustment), Tesla said that in order to meet the growing demand for exports, tesla plans to expand parts production at its Shanghai plant, increase the number of workers, and extend the time of factory operations.
Tesla's sales in China have surged in recent years, and its Gigafactory in Shanghai has become an important export hub for the German and Japanese markets. Last year, the cumulative sales of new energy models worldwide reached nearly 6.5 million, of which Tesla delivered 936,000 vehicles worldwide, occupying the first place in the market share, and the number of Model 3 and Model Y was 911,000. In 2020, Tesla's global delivery figures are "just" 499647 vehicles.
On January 11, Tesla released production data showing that the number of electric vehicles delivered by the Shanghai Gigafactory in 2021 was 484,130 units, an increase of 235% year-on-year, accounting for 51.7% of global deliveries.
According to the Association, Tesla sold 59,845 cars in China and 19,346 domestic retail sales in January this year.
As the world's largest automotive market, China's new energy vehicle sales exceed half of the world's total. The China Association of Automobile Manufacturers (CAAM) predicted in early December that China's new energy vehicle sales would grow by 47% to 5 million units in 2021. On the other hand, China's electric vehicle subsidies will be completely eliminated by the end of 2022.
Earlier this month, Tesla said its revenue in China more than doubled from the previous year to $13.8 billion in 2021. Musk also said in October that production in Shanghai had already exceeded that of the company's plant in Fremont, California, the company's first.
For reference:
https://www.reuters.com/business/autos-transportation/exclusive-tesla-plans-new-shanghai-plant-more-than-double-china-capacity-sources-2022-02-24/
https://cleantechnica.com/2022/01/31/tesla-1-in-world-ev-sales-in-2021/