Since the beginning of this year, Tesla's second factory in China has been rumored to be continuous, the latest news is that Tesla plans to expand the factory in Shanghai, and the production capacity will be increased to 1 million vehicles per year.
However, just when everyone thought that Tesla's second factory was settled in Shanghai and other cities were not playing, Tesla insiders revealed to the media that Shanghai was not the second factory for production expansion.
This response has revived the suspense of Tesla's second factory, and it is still inconclusive who will spend this fragrant food.
01
Why are so many cities there
Scrambling for Tesla's second factory?
Few foreign-funded projects can get such a high degree of popularity as Tesla.
What is the reason?
On the one hand, Tesla is the absolute leader of new energy vehicles in the world, and it is also the most popular technology company in Silicon Valley, with annual sales and market value ranking first in the world among new energy vehicle companies, and the leading enterprises' every move is naturally related to the entire new energy vehicle industry chain.
On the other hand, new energy vehicles are an important starting point for the mainland to build a world scientific and technological power, and have been placed high hopes on the "curve overtaking" of Western countries, so major cities are frantically laying out this industry.
Since Tesla said it would build a second factory in China, at least 10 cities have thrown olive branches in the hope that Tesla will build factories in the local area, including many first- and second-tier cities, including Guangzhou, Shenzhen, Wuhan, Chongqing, Xi'an, Qingdao, Hefei, Shenyang, Yibin, Zhuhai and other cities.
Third, Tesla's way of entering China is very different from that of traditional car companies, which can effectively drive the local industrial chain and is particularly attractive to major cities.
As we all know, traditional car companies entering China generally adopt a joint venture approach, such as GM, Toyota, and Volkswagen's projects in China must be joint ventures with our state-owned enterprises, while Tesla's Shanghai factory is a wholly foreign-owned project, which is also China's first wholly foreign-owned vehicle manufacturing project.
However, although Tesla's Shanghai factory is a wholly foreign-owned project, Shanghai has a requirement: all parts must be localized.
This is very critical, it can effectively drive the local industrial chain. The data shows that the localization rate of parts at Tesla's Shanghai factory has reached more than 90%. In contrast, Tesla's California factory in the United States has a localization rate of only 73% of its parts.
That is to say, although Tesla does not share profits with our state-owned enterprises like Toyota and Volkswagen, it has left the entire industrial chain in China, which is something we value more. Compared with pure profits, what we need now is the ability to manufacture and innovate.
Therefore, if Terrass is stationed in a city, it is actually sending the entire new energy vehicle industry chain, which has a pulling effect on the local economy far exceeds that of ordinary foreign-funded projects.
Coupled with the unprecedented success of Tesla's Shanghai factory, it has also greatly stimulated the impulse of major cities to copy the Shanghai factory.
02
Tesla responds:
Shanghai is expanding production and is not the second plant
On May 4, the media revealed that Tesla will set up a second factory in Shanghai.
According to media reports, Tesla mentioned in a thank-you letter to the Shanghai Lingang Special Zone on May 1 that it plans to build a new factory near Tesla's Shanghai Gigafactory to produce Model 3 and Model Y, which is expected to increase the annual production capacity of 450,000 vehicles, and after the new factory is expanded, Tesla's production capacity in Shanghai will be increased to 1 million vehicles per year. (Tesla's Shanghai plant delivered 484,100 units in 2021, accounting for 51.7% of Tesla's global deliveries in 2021)
It can be seen that Shanghai will continue to sit firmly in Tesla's global "largest automobile export center".
Writing here, everyone may think that the location of Tesla's second factory in China has been settled, but it is not, because there are media reports that Tesla is only expanding production in Shanghai, not the second factory.
According to Xiaoxiang Morning News, Tesla insiders responded to the fact that "a second factory will be built in Shanghai" that it is only an expansion of production, not a second factory.
Relevant people said that Tesla has planned a large piece of land near the existing factory area for new production capacity planning, the news in the Shanghai land exchange market official website in early March hung out a land transfer announcement has shown: the plot area of about 461,100 square meters, located in the free trade zone Lingang heavy equipment industrial zone, access industry type for new energy vehicle manufacturing. Apparently, the land is most likely used for the expansion of the Tesla factory.
Therefore, it is still unknown whether Tesla will have a second factory in China and where it will be located.
03
Where is Tesla really good?
Let's see where Tesla is? The following is the global new energy vehicle sales list in 2021:
and
In 2021, Tesla ranked first in the world with sales of 936,200 vehicles, with sales up 87.2% year-on-year.
BYD (new energy vehicles) ranked second in the world with sales of 593,900 units, an increase of 231.6% year-on-year.
Global sales top 20 new energy brands by region, 8 Chinese brands, 4 German brands, 3 European brands, 2 American brands, 2 Korean brands, and 1 Japanese brand.
China's 8 new energy vehicle brands are: BYD, Wuling, SAIC Passenger Vehicle, Great Wall Euler, GAC Eian, Chery, Xiaopeng and Changan.
Look at Tesla's market cap:
Image source: Data treasure
By the end of 2021, Tesla's market value will reach 6.77 trillion yuan, ranking 6th in the world. In the automotive industry, it ranks as the world's largest listed car company.
04
Tesla's second factory site
What conditions are required?
If Tesla wants to build a second factory in China, the easiest way is to look for it in Shanghai.
The media generally believes that there must be at least the following four basic conditions for the location of Tesla factories: economic development; a complete automotive industry chain; a large port; and proximity to the core market.
First, the economy is relatively developed. Needless to say, economic development means a better business environment and a higher level of commercialization.
Second, it has a complete automotive industry chain. Looking at whether a city's automobile industry chain is strong, it is inevitable to avoid the output of the whole vehicle, the data shows that the five major cities with the highest automobile output in 2021 are Guangzhou, Shanghai, Changchun, Chongqing, Liuzhou, Tesla If you want to choose the second factory, the car output can be said to be experience value.
If you only look at new energy vehicles, Shanghai will produce 631,900 new energy vehicles in 2021, ranking first in the domestic new energy vehicle production, of which Tesla's Shanghai factory contributed 484,100 units.
Looking at Guangzhou, in 2021, Guangzhou's automobile production will be 2.9664 million vehicles, which has ranked first in the country for three consecutive years, as a traditional automobile town, Guangzhou is still performing strongly on the track of new energy vehicles.
In 2021, China's 8 new energy vehicle brands will enter the global TOP20, while Guangzhou will account for 2 in one city, namely GAC E-An and Xiaopeng Motors, with sales of 125,400 units and 98,700 units respectively last year.
On the whole, Shanghai and Guangzhou are the two cities with the strongest strength in the national automobile industry.
Third, it has a large port. Infrastructure such as large ports and large airports is very advantageous for attracting foreign companies, especially a global enterprise such as Tesla, whose products cover the global market, and only close to international large ports can be more convenient to sell to all over the world.
The following is the ranking of cargo throughput of major ports in the country in 2021
Source: Port Circle
Fourth, close to the core market. Which areas have the strongest automobile consumption capacity, which must also be a problem for new energy vehicle companies to consider, close to the core market, which means that transportation costs are lower and it is easier to form a scale effect.
Overall, there are five major consumer markets in the country, namely the Beijing-Tianjin-Hebei Region, the Yangtze River Delta, Guangdong, Hong Kong and Macao, the Chengdu-Chongqing Urban Agglomeration, and the Middle Reaches of the Yangtze River.
The following is the overall sales of cars in major cities across the country in 2021:
The following are the sales of new energy vehicles in major cities in 2021:
Speaking of new energy vehicles, I have to mention the supporting facilities of charging piles to see where the charging piles are the most:
As of March 2022, the provinces with the most public charging piles for electric vehicles in the country are Guangdong, Shanghai, Jiangsu, Beijing and Zhejiang.
In addition, there is a view that the location of Tesla's second factory may also take into account whether the city has consulates and international airports, which can facilitate Tesla's staff to travel around the world.
If the weight of this factor is high, many cities that lack international airports can be excluded. Gateway cities with high international connections, such as Guangzhou, Chengdu and Wuhan, have much greater opportunities.