Tesla Announces Plans to Open a Factory in Shanghai

Tesla Announces Plans to Open a Factory in Shanghai

Vehicle manufacturers are continuously trying to make improvements to their vehicles. Innovations are often made to improve things like design and speed to keep up with consumer demands. And with about 5.4 million non-fatal car accidents occurring in the U.S. each year, manufacturers often put a heavy focus on better safety features too. One vehicle manufacturer, in particular, taking on a new challenge is Tesla.

The automaker recently announced its plans to open a new plant and development center in China. After reaching an agreement with Chinese authorities, Tesla has begun making plans to build its first overseas batter and automobile factory.

The factory is set to open in Shanghai and Tesla plans on eventually producing 500,000 electric vehicles each year at the new plant. This is quite a high number, especially with PwC predicting that there will be about 107 million vehicles manufactured around the world in 2020.

While Tesla hasn’t said how much it plans to put into this new challenge, the automaker will be the only owner of the new factory. In the past, other automakers like General Motors and Volkswagen have had to work with local companies when producing vehicles in China. But under new regulations, China is making that requirement less strict. Already, China is one of the most popular markets for global automakers, with Shanghai being one of the top places in China for the automotive industry.

China is a very competitive market for automakers. While manufacturers contribute about $2.17 trillion to the economy in the U.S. each year, annual auto sales in China are forecasted to pass 35 million by 2025. And with China’s new goal of having 100% electric vehicles by 2030, Tesla is outreaching to the country for electric vehicle production at just the right time.

Two years ago, Elon Musk, Tesla’s chief executive, made the prediction that their Fremont, Calif. plant would produce about 500,000 cars by the end of 2018 — but at the end of June, only 40,000 were in transit or had been delivered. The automaker ran into issues to do a heavy reliance on automated machinery and production bottlenecks. Because of these setbacks, the company needs to be productive at their new plant.

Back in 2013, Tesla began selling cars in China, with about 35 sales centers and 1,200 charging stations throughout the country. And according to LMC Automotive, the automaker sold about 15,000 cars in China last year alone. So along with the new factory serving as a manufacturing plant, it will also include a research and development center and a retail operation. The local Chinese government said that the new factory will be the largest manufacturing project supported by overseas investment Shanghai has ever seen.

The automaker claims that new Shanghai productions won’t affect American operations. So while the factory is still a few years from being up and running, both American and Chinese populations can expect big things from Tesla in the upcoming years.

Staff

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