Tesla Begins Delivery of Model 3S From Shanghai Gigafactory

US car manufacturer, and now the most valuable car company in the country ever – Tesla has announced that it has begun shipping its first batch of customer cars from its Shanghai Gigafactory. One year on from first breaking ground on the site.

The company also announced the launch of a project to manufacture Model Y vehicles in its Shanghai gigafactory.

Tesla CEO Elon Musk was also present at the ceremony and said that “the most amazing thing really is the incredible progress that has been made by the Tesla Shanghai team,” he said. “Without the support of the Chinese government, especially without the help of the Shanghai government of all levels, we would not be able to make this progress.”

“We’ll continue to make significant investments in China, making Model 3, Model Y and future models as well in China,” he added.

The company had signed an agreement with the Shanghai municipal government in July 2018 to build the factory. And in October 2018, it was granted approval to use an 864,885-square-meter tract of land in Lingang for its Shanghai plant.

As the largest foreign-invested manufacturing project in Shanghai, construction of the gigafactory began on January 7, 2019, when the area was still a wasteland. In 10 months, the firm had already entered trial production and by December 30, 2019, the first 15 Model 3 cars were handed over to company employees.

With subsidies and tax breaks approved by the Chinese government, local-made Model 3s will sell for a starting price of 299,050 yuan (USD 42,919), compared with an imported price of 439,000 yuan (USD 63,237). Analysts say the aggressive pricing strategy, coupled with Tesla’s brand appeal and more advanced technologies, will help it attract enough consumers to weather China’s current market slowdown.

The Shanghai plant is capable of producing 1000 vehicles per week, and the company is planning to increase that number to 3000 at the earliest.

Last year, due to issues largely pertaining to the trade tensions with the US, China had registered a  17th straight month of decline for vehicle sales as of November, with deliveries of new energy vehicles down for five months in a row, according to the latest data from the China Association of Automobile Manufacturers. To spur what it considers “real innovation,” the country has also been phasing out subsidies for EV makers, but reduced support is still handed out before the program officially ends after 2020.

In preparation for the tough growth climate in the country, the company has built more than 300 supercharging stations, 2,200 supercharging piles and 2,100 destination charging piles in over 140 Chinese cities.

However, there’s a lot more to be done if the firm wants to sustain its business in the Asian country, and the number one priority for the firm will be to compete with the emergence of other New Energy Vehicles (NEVs) perhaps with equal or better performance.

Now while India continues to follow up one policy decision with another with ambitious EV targets for the coming decade, China since allowing for foreign investments not so long ago has seen one of the biggest car companies come in, establish a massive base and start selling vehicles in the country with Government subsidies inside one year. In India, well, the local electric two-wheeler manufacturers are still struggling with gaining benefits from a scheme that was introduced to cater to the EV transition the FAME – II.