Tesla acquires 210-hectare land for Chinese Gigafactory in Lingang area of Shanghai

Tesla acquires 210-hectare land for Chinese Gigafactory in Lingang area of Shanghai-chinese

Tesla has acquired 210 hectares of land in the Lingang area of Shanghai for its third planned Gigafactory. However, the price has been commented on. Lingang is located on the coast about 75 kilometers from central Shanghai. Several automobile manufacturers – also from abroad – have production facilities there. Furthermore, unmarked test vehicles (test vehicles) can often be seen on the streets there. Sounds like the right location for Tesla’s Gigafactory 3.

Last week, we had reported that automakers was the only bidder for a property with an auction price of about 1 billion yuan ($ 145 million). The information is currently not public. A decision of the Shanghaier government to allocate the Land Tesla could already be taken this month, they said. The decision was made now.

After Teslas’s hard struggle for an electric car factory in China, was laid in May 2018 the basis for a Tesla manufacturing in China. This is justified by the elimination of the 50/50 rule, so the car manufacturer does not require a Chinese partner anymore, which works together with its own company a joint venture to grasp foot. Shortly thereafter, the American company was talking to the Chinese Responsible.

In July, reports were confirmed by Tesla CEO Elon Musk that he was in Shanghai and signed an agreement with the city government to build a manufacturing facility there. Almost everything is to be manufactured in Tesla‘s Chinese Gigafactory, from the battery cell to the finished electric car. As planned, Tesla’s next production facility is to be built in Lingang New City, a planned city in the Pudong district of Shanghai. Musk said it will be “about two years” before production of vehicles begins, “then another two to three years before the factory fully ramps up, by around 500 annually.”.to produce 000 vehicles for Chinese customers”. Tesla now made it clear that they were relying on an accelerated construction plan.

Elon Musk said that Tesla expects to spend about $2 billion to quickly ramp Gigafactory 3 to a production rate of about 250.000 vehicles per year before ramping up to full capacity.

The automaker is considering raising some of the $5 billion it plans to invest in the plant near Shanghai from local partners, Bloomberg News reported on Jan. August and quoted a person familiar with the plans.

What is certain, however, is that producing cars locally in China will drastically reduce costs. Recent trade tensions between the US and China have resulted in a 40% import tariff on Tesla vehicles. Earlier this month, Tesla said the increased tariffs are forcing it to speed up construction of the Shanghai factory. In the result report of the 3rd. Quarterly it states, among other things:

“Taking into account the cost of sea transportation and import duties, Tesla has a cost disadvantage of 55% to 60% compared to the Chinese-made car. This leads to a challenging competitive environment as China is by far the largest market for electric vehicles. To address this issue, we are accelerating the construction of our Shanghai facility, which we expect to be capital efficient and built quickly, leveraging many of the lessons learned from the Model 3 ramp in North America.”

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