Source: Shanghai Municipal People’s Government
Shanghai Mayor Ying Yong as well as Tesla Chairman as well as CEO Elon Musk pose in by of a plaque for the Tesla (Shanghai) Ltd. Electric Vehicle Development as well as Innovation Center.
Tesla successfully acquired an 864,885-square meter plot in Shanghai’s Lingang area for the electric car maker’s completely new factory, according to an announcement by Lingang Wednesday afternoon. No cost was immediately disclosed.
Plans for the wholly-owned factory were first announced in July. Lingang is actually located on the coast, about 47 miles southeast of the center of Shanghai or a roughly two-hour subway ride. Several auto manufacturers with foreign ties have facilities there, as well as unmarked test vehicles can be seen roaming the streets.
Tesla expects the factory to produce its first cars in three years, according to an earnings Discharge in August. The facility will initially have capacity for about 250,000 vehicles as well as battery packs a year, as well as plans to eventually double that will, the Discharge said.
Funding will mostly come by local debt, as well as Tesla’s own investment “will not start in any significant way until 2019,” the company said inside the August Discharge.
Producing cars in China, the globe’s largest market for electric vehicles, would certainly significantly lower costs for Tesla.
The company noted in an Oct. 2 report the idea cannot access the same cash incentives as local Chinese manufacturers, as well as overall ocean transport costs as well as tariffs mean the automaker is actually operating at a 55 percent to 60 percent cost disadvantage compared which has a domestic equivalent.
Shanghai-based Nio, nicknamed the “Tesla of China,” went public inside the U.S. in September as well as said earlier that will week the idea beat its own fiscal third quarter production target by several hundred vehicles. Baillie Gifford, Tesla’s largest outside investor, disclosed earlier that will month an 11.4 percent stake in Nio.
—CNBC’s Robert Ferris contributed to that will report.