Rumor: Expanded Tesla Shanghai Factory Will Produce 2 Million EVs Annually

Tesla is planning a new Shanghai factory that will more than double its production capacity in China, Reuters reports. Tesla, according to the report, plans to start construction on a new plant as soon as next month. The plant is part of its plan to more than double production capacity in China to meet the growing demand for its cars.

Two anonymous sources spoke to Reuters, and they added that once the new plant is fully operational, Tesla will have the capacity to produce up to 2 million cars annually at its expanded Shanghai facility, which is its main export hub. The new plant is expected to be located near Tesla’s existing production base in Lingang, Pudong New Area.

Earlier this month, my colleague Steve Hanley wrote this article on how Tesla Giga Shanghai’s capacity would exceed one million cars this year. Steve cited reports from CnEVPost, but according to an update, the blogger who originally posted that information deleted their blog post. However, if the Reuters article is to be believed, then Tesla’s new facility in Shanghai will actually double that earlier predicted increase to more than a million cars annually.

Tesla’s Gigafactory in Shanghai has been a key part of its success. Tesla is able to export made-in-China clean energy vehicles to Europe, Asia, and Australia. Tesla mentioned in its Q4 shareholder deck that the production of both Model 3 and Y vehicles continued to ramp up throughout 2021 at Giga Shanghai, and added that it continues to be Tesla’s main export hub.

Around half of the vehicles Tesla delivered in 2021 came from Shanghai. Yahoo! Finance noted that Giga Shanghai is poised to play a more prominent role since Tesla moved its export hub from Fremont to the China factory, which initially started deliveries at the end of 2019. Tesla is also investing $188 million to expand Shanghai’s factory capacity, according to another Reuters report published back in November 2021.