A single violin note hovers in the air as the camera pans across the Tesla China Gigafactory. The Gigafactory 3 complex, as it’s known, comprises 865,000 square meters and is situated on a parcel of about 210 acres of land. Set in an industrial area, the site is in the Pudong (“The East Bank”) district of Shanghai, across from the historic city center and abutting the Huangpu River, which extends all the way to the East China Sea.
A YouTube video uses aerials — shot with a drone — to allow us to glide over different construction areas. It shows what 6 months of diligent construction can accomplish. Roofing is nearly done. Cement trucks move to and fro from inside the massive factory, and several large trucks are loaded with massive machinery. Stacks of construction materials in red and blue lines point toward a ramp, as if drones were moving in and out of a hive. Rectangular white building footprints give way to a 20 girder high metal framework. Haphazard piles of red-and-white building supplies flank HVAC ductwork. Cranes sweep across the scene, depositing more more materials.
For several decades, western automakers who wanted to dually build and sell vehicles in China had to join into a venture with a Chinese company. Those local ties were essential to any non-Chinese business endeavor. Chinese automakers, notably, have benefited from around $60 billion worth of subsidies and incentives since 2012, designed to make new energy vehicles increasingly affordable for Chinese drivers, according to ZoZoGo.
China is already the most dominant global EV consumer, and it doesn’t seem that will change anytime in the foreseeable future, with Chinese EV sales approximately equal to the rest of the world’s combined, and growing fast.
Tesla CEO Elon Musk long emphasized that Tesla wants to be much more than a car distributor in China: it wanted to build its all-electric vehicles in China. Enter Gigafactory 3, both a feat of international negotiations as well as construction. The Tesla Gigafactory 3 will produce battery cells as well as the Tesla Model 3 and Model Y. Until the manufacturing begins, the cost to purchase a Tesla will continue to be based on US-produced prices plus transport, tariffs, etc. Once Tesla is able to switch from construction to manufacturing at the Gigafactory 3 factory in Shanghai, though, the whole game will change.
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
Approval to build Gigafactory 3 came from the Chinese government in July, 2018, while groundbreaking for the plant took place in January, 2019 — with Tesla CEO Elon Musk in attendance.
Looking forward to breaking ground on the @Tesla Shanghai Gigafactory today!
— Elon Musk (@elonmusk) January 7, 2019
According to Chinese periodical Caiging, construction had been expected to accelerate in mid-2019, consistent with the typically blinding fast pace of large construction in China. The project contractor is China Construction Third Engineering Bureau Co., Ltd., a unit of state-owned China State Construction Engineering. The South China Morning Post outlined how the speed of the $5 billion project underscores China’s pressing need to bring to bear significant foreign investment projects as the country “grapples with its slowest economic growth in a decade.”
A now-proven claim of blazing efficiency to raise the Gigafactory 3 concurs with Tesla’s 2018 Q3 statement about the Gigafactory 3 intentions. In it, Tesla stated that Gigafactory 3 construction was expected to be rapid and capital-efficient, partially because of lessons learned from the Model 3 intensity in Fremont as well as the battery ramp in Nevada.
At the Tesla’s shareholders’ meeting earlier this month, Musk noted that Gigafactory 3 is on schedule to complete construction sometime in summer 2019, adding that, to his knowledge, it is the fastest-built car manufacturing facility in the world. He revealed that production equipment including “stamping machines and the paint shop” are already in place.
Indeed, the YouTube video exterior shots show a factory that is quite far along in the construction process. Other areas, however, seem to be at median stages, with cement mixer truckers, cranes, water trucks, laddered vehicles, and transporters all on the move.
Gigafactory 3 is Situated near Finance and Trade Zone
In shots that capture Gigafactory 3 against the city background, China’s emphasis on built environments and their consequences are clear. A carefully engineered series of verdant green ditches give way to two wide roads, other massive factories, and a skyline submerged in smog. One view from the drone looks at the Gigafactory from a broad side angle that expresses its vastness. Running across numerous city blocks, the footprint embodies huge scale, with multiple manufacturing functions evidently emerging within the structure.
A zoom-in shot highlights a series of horizontal struts held in place by white guidewires. Peeking through the skeleton and into the interior, we see empty floor spaces on some levels and other levels full of heavy equipment and materials. Workers walk across the roofing upper layer of construction like ants on morning dew. From the side, the scene is in motion, with constant flows of materials in transit.
What was once a historic area in Shanghai is now the Lujiazui Finance and Trade Zone, so Gigafactory 3 is set adjacent to an upscale business section of Shanghai. Contained within it are the Shanghai Stock Exchange, the Oriental Pearl Tower, the Jin Mao Tower, the Shanghai World Financial Center, and the Shanghai Tower. The remaining area includes the Port of Shanghai, the Shanghai Expo and Century Park, Zhangjiang Hi-Tech Park, Shanghai Pudong International Airport, the Jiuduansha Wetland Nature Reserve, and the Shanghai Disney Resort.
The global transformation in mobility from gasoline and diesel vehicles to electric vehicles is accelerating at an exponential pace. The conversion to all-electric transportation is in process now in China, which is set to become the world’s largest automobile market, with 23 million cars sold in 2018. While the West may be seeing individual auto ownership levels at never-again-to-be-seen peaks, hundreds of millions of Chinese families don’t yet own a car.
With national emphasis on buying electric cars, by 2015, EV sales in China had already surpassed US levels. In 2018, Chinese sales exceeded 1.1 million cars, more than 55% of all electric vehicles sold in the world and more than 3 times as many as Chinese customers had bought 2 years earlier. US electric vehicle sales that year were just 358,000.
China has a tremendous desire for electric cars and is generally thought to have the capacity to sell 2 to 3 million electric cars in 2019 and possibly 3–5 million in 2020. A 10–20% market share in China would get Tesla to the 500,000 car per year capacity of the Gigafactory 3 within 3–4 years. With the intensity of Chinese construction and Tesla’s laser focus on the Chinese EV marketplace, Gigafactory 3’s rise from the East Bank’s edges place the all-electric car company in the lead to tackle the world’s most promising consumer auto market.
Tesla’s done it again — led the way when others scoffed, envisioned the potential when critics said it couldn’t be done, and enacted a plan of compromise to make Gigafactory 3 a reality. Tesla is at the forefront of another segment of future sustainable mobility — now.
Image gallery taken from YouTube video posted by Jason Yang on June 15, 2019.