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Tesla’s second assembly line near Shanghai Gigafactory to add 450,000 units of annual capacity

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Tesla has picked a location to build its second production line in Shanghai near its existing Gigafactory 3, which would consolidate the production base’s role as its “largest export hub” globally, according to a letter the electric carmaker wrote to local authorities and seen by the Post.

The carmaker said the new assembly line will have an annual capacity of 450,000 units and will make Model 3 and Model Y vehicles when the first phase of construction is completed.

The assembly line will be a part of Gigafactory 3, also known as Giga Shanghai, which started producing Model 3s at the end of 2019, according to two sources with knowledge of the matter.

The letter confirmed a report by the Post on February 25 that Tesla was looking to build a second production line in Shanghai to more than double its capacity in China.

Its existing Giga Shanghai plant built 484,130 Model 3 and Model Y vehicles in 2021, representing 51.7 per cent of its global total of 936,000 units.

In China, 321,000 Model 3 and Model Y vehicles were delivered to customers last year, 117 per cent higher than 2020.

The remaining 163,130 cars were exported to Tesla’s major markets such as Germany and Japan.

“By adding a new assembly line, Tesla’s ultimate goal is to boost production capacity in Shanghai to 2 million units a year,” said Chen Jinzhu, CEO of Shanghai Mingliang Auto Service, a consultancy. “It is just a matter of time before Elon Musk’s company achieves that goal.”

A single shift at Giga Shanghai is now able to churn out more than 1,000 vehicles. It normally operates two shifts a day, but plans to run the plant longer.

In a filing to the environment regulator in Shanghai in February, Tesla said it aimed to expand the production of car parts at the Shanghai factory and planned to hire additional workers.

The Shanghai plant, Tesla’s first beachhead outside the US, is the mainland’s only carmaking business fully owned by a foreign investor.

Beijing hopes Tesla’s mainland-based operations will eventually reinforce its ambitions of becoming a global leader in electric cars as the company plans to set up a complete supply chain.

Tesla, the runaway front-runner in China’s premium EV segment, also said in the letter that the Lingang free-trade zone administration gave it tremendous support in resuming production by helping transport 6,000 workers and conduct antivirus prevention measures at the Giga Shanghai facility.

Austin, Texas-based Tesla idled the plant at Giga Shanghai from March 28 to April 18 because of a citywide lockdown in Shanghai, the new epicentre of China’s latest Covid-19 outbreak.

The halt caused a production loss of about 50,000 units.

Tesla is now able to keep only one shift operating at full capacity because of a broken supply chain.

 


Post time: May-05-2022