Monday, 19 November, 2018

Tesla secures land for Shanghai factory, first outside US

Tesla secures land for its first overseas Gigafactory Business 17 Oct 2018 Tesla secures 1,200-acre plot for first overseas Gigafactory
Ginger Lawrence | 19 October, 2018, 13:32

Tesla on Wednesday said it has scooped up a 210-acre plot of land in China to build its next Gigafactory - digging itself deeper into the middle of the tariff battle between President Trump and China.

Plans for the wholly-owned factory were first announced in July.

Those plans have gone ahead despite tariff hikes by Washington and Beijing on billions of dollars of each other's goods in a dispute over Chinese technology policy.

The land agreement marks a key step toward the firm and its Chief Executive Elon Musk making cars locally in China for the fast-growing market, even as tariffs imposed by Beijing on US -made goods have caused it to hike prices of its imported models.

Tesla's investment in China, the world's largest auto market, can help it effectively dodge import duties levied on foreign-made vehicles in China, which can be as high as 40 per cent.

Last year, reports circulated that Tesla was in talks with the Shanghai government to build a factory in the city's "free trade zone".

Located in the Lingang area southeast of the Shanghai city center, the factory is expected to begin producing cars and battery packs within three years with an initial capacity of 250,000 vehicles.

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[It is] An important milestone for what will be our next advanced, sustainably developed manufacturing site.

Tesla has announced the purchase of 860,000 square metres of land from the Shanghai government for a new Gigafactory.

Chief executive Elon Musk said in a September 30 letter to USA regulators that the company was "very close to achieving profitability". CEO Elon Musk said in a September 30 letter to US securities regulators that the company is "very close to achieving profitability".

Tesla's estimated sales in China of under 15,000 vehicles in 2017 gave it a market share of less than 3%.

The California-based company was among the few Western automakers to stall its arrival in China until the country relaxed its foreign ownership requirements.

Lower-priced electric models from GM, VW and other brands are due to hit the market this year, well before Tesla is up and running in Shanghai.