With the California factory still facing production problems, Tesla wants to try out new markets – and if there was ever a big market to conquer, it is China. The company wants an enormous plant, so as a development center.
Tesla officials confirmed yesterday that they agreed on building an automobile factory in Shanghai – the first plant outside of the U.S.A, that would hopefully, over time, be able to produce approximately 500,000 pieces on an annual level. It is not precisely determined how much they actually plan to invest, but they certainly want to be the sole owners.
Tesla company said it wants to start as soon as possible, whenever they obtain all the necessary documents and permits. They predicted two years before they started actually producing cars, plus two to three more to reach the full capacity. One of the auto-manufacturing experts predicted that it will be extremely difficult to set a plant in China in motion, because of the simple fact that they want to move their business to California. Tesla’s chief executive Elon Musk said that China is this company’s next ambition and they will do their best to proceed accordingly.
Wishes and dreams
This is not the first ambition that the first man of Tesla ever had – he predicted the plant in California to produce – again – 500,000 cars per year. He then announced a battery-driven semi track to start being produced by the end of 2019. It has also been promised that this company first mass-produced product the Model 3 sedan priced 35000 dollars.
None of these plans and promises has been realized so far, and on top of it all, the company records only losses since its founding in 2003. The finances haven’t been looking good for a while and analysts are worried. China is the main target location for Tesla, being the world’s largest market for electric vehicles.
The Chinese government promotes the use and sale of electric cars as a way to improve air quality and cut harmful emissions. The company began selling there in 2013 and sold about 15 thousand cars during the last year. The firm’s spokesman said the plant in China won’t spoil anything or worsen the trade dispute. However, the President is not exactly keen on this project.
The trade fights
The general idea behind the dispute actually was to prevent American companies to move their operations to China. China’s tariffs were always a problem for Tesla, and compared the rules with “competing in an Olympic race wearing lead shoes”. No question that a plant in China would help both countries immeasurably.
It would aid Beijing to take a strong global position in manufacturing electric cars. It is already in their plan “China 2025”. For Tesla, it would be great to put itself close to the huge automotive supply chain. They already have a number of electric cars, but they are smaller and cheaper. Tesla would be a great step forward.