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| The plant will eventually have an annual production capacity of 500,000 vehicles, Tesla says |
Tesla boss Elon Musk presided Monday over the ground-breaking for a Shanghai factory that will allow the electric-car manufacturer to dodge the China-US tariff crossfire and sell directly to the world's biggest market for "green" vehicles.
The plant
in a Shanghai suburb is Musk's biggest overseas move yet and will eventually
have an annual production capacity of 500,000 vehicles, Tesla says,
dramatically increasing the California-based company's output.
"China
is becoming the global leader in electric vehicle adoption, and it is a market
that is critical to Tesla's mission to accelerate the world's transition to
sustainable energy," Musk said, according to a statement released by the
manufacturer.
Musk had
hinted recently at an upcoming Shanghai trip to break ground for the plant but
Monday's event was not publicly announced until the Tesla CEO broke the news in
a series of tweets earlier in the day.
In typically
iconoclastic style, the 47-year-old Musk changed his Twitter profile picture
around the time of the ceremony to one showing his face with an exaggerated
handlebar moustache drawn on it.
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Tesla boss
Elon Musk (L with Shanghai Mayor Ying Yong) said China is becoming
the global
leader in electric vehicle adoption
|
The
Shanghai government later posted photos on social media showing Musk and
officials from Tesla and the city on a large stage at a launch ceremony at the
site, located on Shanghai's distant outskirts.
No
investment figures were given but the cost of the project has been estimated by
analysts at up to $5 billion.
The
Shanghai venture comes as US companies face pressure from President Donald
Trump to keep manufacturing jobs at home, and as Beijing and Washington wage a
trade spat that has seen both sides levy tariffs on hundreds of billions of
dollars of products.
Slowing
down
Analysts
say production in China would allow Tesla to side-step such measures, which
have already caused a spike in the price of the cars the company now imports to
the Chinese market.
But construction of the plant -- the subject of stop-start negotiations between Tesla and Shanghai for well over a year -- gets under way just as the outlook for China's consumer market has turned worrisome.
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Elon Musk
said Tesla's Shanghai plant would suppply China with 'affordable
versions' of
its Model 3
|
But construction of the plant -- the subject of stop-start negotiations between Tesla and Shanghai for well over a year -- gets under way just as the outlook for China's consumer market has turned worrisome.
Apple
sparked global alarm over the prospects for the world's second-largest economy
last week when it cut its revenue forecast, citing slowing demand in China and
the trade war.
Domestic
and foreign automakers have been racing to grab shares of China's
electric-vehicle sector -- already the world's biggest and expected to continue
to grow as the Chinese government pushes clean technologies.
But the
pace of growth is expected to slow along with China's economy.
The
Shanghai factory will be Tesla's first production line outside the United
States.
Musk
tweeted earlier Monday that Tesla was "aiming to finish initial
construction this summer, start Model 3 production end of year & reach
high-volume production next year".
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A US-made
Tesla Model 3 now starts at around $50,000 but Elon Musk says he
aims to get
that down to $35,000
|
The
Shanghai plant would supply the "Greater China region" with
"affordable versions" of the Tesla Model 3 -- the carmaker's first
mid-price, mass-market vehicle -- and its planned Model Y, Musk tweeted.
The Model
S, Model X and "higher cost versions" of the 3 and Y would continue
to be made in the United States for the global market, including China, he
added.
Despite its
relative affordability compared to other Tesla models, the price of a US-made
Model 3 now starts at about $50,000, but Musk has said he aims to get that down
to $35,000. He provided no price figures for China-made cars.
China
typically requires foreign automakers to forge joint ventures with domestic
firms when establishing manufacturing plants, which means sharing profits and
technology with local partners.
But Tesla
has said its Shanghai plant will be "wholly-owned" by the company.
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