Elon Musk was in Shanghai on January 7 to participate in the groundbreaking ceremony for Gigafactory 3, Tesla’s first gigafactory outside the US. Not surprisingly, Elon took to Twitter to celebrate the event … just a couple of hours after we published about the news. But there are a few things you might have missed if you caught our early coverage and didn’t keep refreshing for updates throughout the past 24 hours..
Shanghai Giga will produce affordable versions of 3/Y for greater China. All Model S/X & higher cost versions of Model 3/Y will still be built in US for WW market, incl China.
— Elon Musk (@elonmusk) January 7, 2019
After the ceremony, Musk spoke to the local press and said that he is very impressed with the speed and quality of work possible in Shanghai. He made particular reference to the fact that a large multi-bay Supercharger location was completed in just 12 days last year, the quickest of anywhere in the world. He indicated the factory building would be finished by mid-year and would start producing cars by the end of 2019 if everything goes according to plan. (When has that ever happened?)
He was at pains to explain that Tesla is absorbing the tariffs imposed by China on US-built cars. Gigafactory 3 — which will have a capacity of 500,000 cars a year — will focus on manufacturing the more affordable versions of the Model 3 and later the Model Y so that Chinese customers can begin driving sustainable cars as soon as possible. The factory will also build cars for export to other Asian markets.
The more expensive versions of the Model 3 — Long Range, All Wheel Drive, Performance upgrade — will continue to be manufactured in America. Those are higher profit vehicles and Musk says the company will need to sell lots of them to help pay for the new factory. He encouraged people in China to place their orders for the US-made cars to help fund the Shanghai facility.
Tesla has learned much from building Model 3 production lines in the United States, and those lessons will be applied to bring the new Shanghai factory online as soon as possible. Musk also called upon local engineering talent to join the Tesla team, saying a junior engineer today could wind up taking his job someday, as the possibilities for advancement within the company are virtually unlimited. For more on Musk’s remarks, check out the video below.