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Tesla Shanghai Gigafactory and China-made Model 3: Summary

by Eva Fox November 08, 2019

Tesla Shanghai Gigafactory and China-made Model 3: Summary

Tesla Gigafactory 3 is the largest foreign investment production project in the history of Shanghai. The factory, which is located in the Lingang Free Trade Zone, about 40 kilometers from Pudong Airport, was built at lightning speed, in less than 10 months.

As production time approached, on November 7, the Shanghai Gigafactory was officially opened for the first time to Chinese media. And although the media could not visit the production line and workshop, they got a little more - a test drive of the domestic Model 3 from the Shanghai Gigafactory. Read about this in our article "The first test of Made in China Model 3".

According to BJNews,  Liu Yang, senior manager of Shanghai Tesla Super Factory's Tesla Training Institute, told reporters that by the end of this year, the company expects to release a small amount of domestic production of Model 3. As for large-scale shipments, it will wait until the first quarter of next year.

Construction takes less than 10 months

Currently, the Shanghai Gigafactory (Phase I) has four workshops for stamping, bodywork, painting and final assembly. In addition to the high speed of construction, the Shanghai Gigafactory also significantly reduced the cost of construction. Tesla said that the cost of building a Gigafactory production line in Shanghai is 65% lower than in the US (calculated according to capital costs per unit of capacity).

Due to privacy concerns, Tesla did not open visits to the production line for the media, but Liu Yang, senior manager of Tesla China Training Institute, told reporters about the construction of the factory and its production line. Liu Yang said that in fact, the construction period of the Shanghai Gigafactory was less than 10 months. The factory entered the construction phase from the end of February this year and completed the main project in mid-September, which is a miracle in the automotive industry and even in the industrial sphere.

“The factory can complete construction in such a short period of time, primarily thanks to government support, followed by the efforts of Tesla engineers and technicians.” Liu Yang said that the average age of employees at the Shanghai Gigafactory is about 30 years, and each of them has many years of experience."

Regarding production lines, Liu Yang said the Shanghai Gigafactory uses a large number of robots and automated production processes. The Shanghai Gigafactory sets robots above the production line more than the traditional factory, and forms three-dimensional welding with robots on both sides. When Tesla unveiled photos of the Shanghai Gigafactory in the third quarterly report, the company was equipped with a large number of KUKA robots on the production line.

In addition to hardware, Shanghai Gigafactory has reached a very high level in software development. Liu Yang said that many key programs at the Shanghai super factory were developed by local engineers, and graduates from renowned schools such as Stanford and Tsinghua University have made Shanghai super factory software the highest standard in the industry.

Tesla said China will be the largest market for Model 3

In fact, the Chinese market is indeed a very important source of income for Tesla. In the first three quarters of this year, Tesla's car sales in China totaled $2.138 billion, significantly more than $1.445 billion for the same period last year.

In the third quarter, Tesla's sales in China reached $669 million, second only to the United States, to continue to be Tesla's second largest market. In a third-quarter earnings report, Tesla even predicted that China would become the largest market for Model 3.

However, it is easy to overlook that China’s new energy automotive industry also needs Tesla to enter China. As the world leader in the automotive industry, operating on new energy sources, Tesla has obvious advantages in the “three forces” (electric drive, battery, electronic control) and is expected to contribute to the rapid development of new energy vehicles, including new vehicles.

The completion of the Shanghai Gigafactory is the key to further opening up the Chinese market to Tesla, so Tesla promised the government to start paying tax revenues in 2023 by paying an annual tax of 2.23 billion yuan (about $323 million). And over the next five years, the amount of investment in the Shanghai Gigafactory reached 14.08 billion yuan (about $2 billion).

Domestic Model 3

For Tesla, the Shanghai Gigafactoryhave paramount importance for the company's total production capacity to reach 500,000 units per year. The Shanghai Gigafactory is expected to operate with a capacity of 3,000 Model 3 per week, plus 7,000 units in Fremont, California, USA. Tesla will reach the 3-week planned production level of the model at 10,000 by the end of this year.

With the completion of the Shanghai Gigafactory, Tesla's production facilities will be directly improved. Currently, the Shanghai Gigafactory has completed only Phase 1 of construction; it is estimated that the annual production will be 150,000 units of Model 3, but in the future, with the Phase 2 of construction, the factory will also produce Model Y, and annual production is expected to reach 500,000 units.
Read more about this in our article "Tesla Gigafactory 3 will produce 3,000 Model 3 per week, says VP"

The price of domestic Model 3 is 355,800 yuan.

Domestic Tesla Model 3 was made with a range 286 miles, a maximum speed of 158 mph and an acceleration of 5.6 seconds from 0 to 60 mph. It is expected that it will be delivered in the first quarter of next year.

Liu Yang said the Model 3 produced at the factory is no different from that produced in the United States and is consistent in terms of working conditions, body length, and even quality and service. “The Shanghai Gigafactory is more inclined to adopt the Chinese supply chain. There are several suppliers in Tesla who are Chinese companies. We will buy from the best suppliers. ”

It is expected that the domestic Model 3 after the purchase is exempt from taxes and will receive a certain amount of new energy subsidies.

It is worth noting that the Shanghai Gigafactory emphasizes the concepts of “Made in China” and “Artisan Spirit” and hopes that the domestic Model 3 will be more improved in localization, such as V10, which Tesla released in September. Also, some domestic streaming multimedia resources were introduced into the system.

 




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