Tesla Gigafactory 3 China Update: Production To Begin Mid-2019

The land secured by Tesla for its Gigafactory 3 in Shanghai
Shanghai municipal government said that Tesla Gigafactory 3 is set to begin production in the second half of 2019. (Photo: REUTERS/Yilei Sun)

Tesla's Gigafactory 3, its first overseas facility, is ready to accommodate car production in the second half of 2019, the Shanghai municipal posted on WeChat on Wednesday.

The project, called locally as the Tesla Super Factory, has currently completed land leveling and is about to start construction, the WeChat post read.

The post was made online after an official meeting and an event between the local government and  Tesla China officials, attended by Shanghai Mayor Ying Yong and Vice Mayor WuQing.

The facility, located in the Lingang Heavy Equipment Industrial Zone, has become so far the largest foreign-invested manufacturing project for Shanghai, the municipality said.

The local mayor said projects like Tesla's could advance the manufacturing and related emerging industries in the region, bringing the need boost for the local economy. He added that the municipality will continue welcoming projects that will promote intelligent manufacturing, industrial innovation and industrial strength that comprised Shanghai's real economy.

Tesla has confirmed with China Daily the announcement made by the Shanghai municipal government. The company added that the announcement echoed what has been discussed during the company's financial results in October. At the time, Tesla said it aims to speed up manufacturing schedule in China to make Model 3 more affordable for the Chinese consumers. It said that the move is to address the high cost of production of importing cars manufactured in the United States as the China-US trade war persist. 

In the same month, Reuters reported that Tesla inked a deal with the Shanghai government for an 860,000 square meter plot for its Gigafactory 3. While the price of the acquisition was not revealed, the Shanghai Bureau of Planning and Land Resources said that a plot of land with the same measurement was sold through an auction with a price tag of $140.51 million.

As for the actual agreement on building the Gigafactory 3 in Shanghai, the deal had long been inked in July.

Tesla's venture out of the United States to the world's largest market for electric vehicles came months ahead of remark from White House Economic Adviser Larry Kudlow saying that China may cut the US car tariffs to as low as zero percent. It may be imposed on all cars coming into China from the United States.

Kudlow's statement came after Chinese President Xi Jinping and US President Donald Trump agreed on a 90-day truce during their working dinner at the G20 Summit held in Buenos Aires on Dec. 1.

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