Sina Technology has reported that Tesla’s Giga Shanghai factory is planning to produce 550,000 cars in 2021, and also plans to export more than 100,000 of those made-in-China Teslas. 36 Krypton learned that 300,000 of those vehicles will be Model 3 cars and the remaining 250,000 will be Model Ys. “Tesla has issued ordering requirements to core component suppliers,” a source told 36 Krypton.
For 2020, Tesla’s goal was to make 150,000 units, which now seems small compared to the larger goal planned for next year. The reason for that huge jump is two-fold. Tesla has the upcoming completion of its second phase of the factory and the factory will also be exporting vehicles overseas. The same source told 36 Krypton, “Of the 550,000 units, about 100,000 Model 3 units are for export, and Model Y also plans to export 10,000 units.”
Another Step Closer To 1 Million Cars
During Tesla’s 2020 Annual Shareholder Meeting, Elon Musk, Tesla’s CEO, said that Giga Shanghai could eventually produce 1 million vehicles a year. Tesla has already started exporting made-in-China Model 3 cars to Europe. Last month, photos showed that Tesla was planning to ship at least 7,000 cars from its Shanghai factory to Europe. They are scheduled to arrive at a port in Belgium sometime this month. Customers in Germany, France, Italy, Portugal, Switzerland, and Sweden will receive these cars.
Tesla’s China-To-Europe Development Is Noteworthy
An American company has the first-ever fully foreign-owned factory in China, a country that recently had a trade war with the soon-to-be-former Trump administration, which is an achievement that is incredibly noteworthy. Add into the mix that that same American company planned and has already started exporting its goods to Europe from China. Although other automakers have done this, they have had long relationships and development plans there, whereas Tesla is considered a baby compared to them.
In October, CNN Business reported that Song Gang, director of manufacturing and operations for Tesla’s Giga Shanghai, called Tesla’s move “an important step in Tesla’s global layout. Exporting to Europe means the quality of made-in-China Model 3 sedans has been recognized by the European market.” That should also help support demand for these Tesla models in China.
Sofya Bakhta, a marketing strategy analyst at Daxue Consulting, told CNN Business, “Compared with the American version, the production cost of the Chinese Tesla Model 3 has dropped by 20% [to] 28%,” which is in line with what Tesla has told its shareholders — that the factory in China was around 65% cheaper to build than its Model 3 plant in the US. It’s also less expensive to build a Model 3 in China than in America.
Daniel Ives, an analyst for Wedbush Securities, noted that Tesla’s operations in China are “the linchpin to [its] production and distribution,” while adding “Tesla is using this as a strategic advantage to go after other regions and pockets of Europe.” Wedbush, noted CNN, published a research note predicting that Tesla’s “shining [Gigafactory] success in China” will help it deliver better earnings while predicting how important the Chinese market will be for Tesla. “Ultimately, we see China representing 40%+ of global sales for the company potentially by early 2022.” The article also noted that the Tesla has become the largest seller of EVs in China.
Photos courtesy Tesla