Tesla (TSLA) is receiving competing bids for a second Gigafactory in China, according to new documents released by a Chinese province. The automaker said that it expects to announce a new factory location this year.
Tesla currently operates two main factories, Tesla Fremont and Gigafactory Shanghai, and it has Gigafactory Texas and Gigafactory Berlin slowly starting to ramp up production.
Those four projects alone should push Tesla’s production capacity beyond 3 million vehicles annually by the end of next year, but the automaker has much greater ambitions for this decade that will require several more factories.
During Tesla’s latest earnings call last month, CEO Elon Musk said that we can expect announcements later this year about new factory locations:
2022 is the year we will be looking at factory locations to see what makes the most sense, possibly with some announcement by the end of this year.
Another factory in Europe and yet another in China have been rumored over the last year.
New information now points to Tesla actively looking for a new location in China and having provinces and municipalities compete against each other as they did before the automaker chose Shanghai.
Car News China reports on a new document released by the Liaoning Province that references a Tesla vehicle factory project:
On February 11, Liaoning Province’s official Wechat account, “Liaoning Release,” published an article titled “Five Grasps of Dadong District of Shenyang City, Striving to be the Pioneer in Revitalization Development.” The report stated that Shenyang City is actively preparing to implement Tesla’s vehicle project.
However, it’s not a done deal. The statement apparently translate to something more aspirational as if the government is bidding for the project.
When asked about the statement, Tesla China’s PR department said that they have no plan for a factory in Shanyang, but they didn’t deny being on the hunt for a new factory location in the country. Shenyang is the largest city in Northeastern China, and it is the capital of Liaoning Province.
The report also mentions several other regions competing for the next Tesla factory in China, including “Qingdao, Wuhan, Hangzhou, Hefei, Zhengzhou, Shenzhen, and Jinan.” As it looks for a new location for a second factory, Tesla is not necessarily looking for financial incentives like tax breaks, but rather less restrictions in terms of ownership of production capacity.
Tesla was able to get the first wholly foreign-owned car factory in China by building its Shanghai factory in a free-trade zone.
The automaker is likely going to look for a similar deal for a second factory in China and replicate the success of Gigafactory Shanghai, which is now Tesla’s biggest factory by production volume, and its main export hub.
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