Tesla says it will turn Shanghai into ‘the world’s largest vehicle export hub’ with new factory

Tesla says it will turn Shanghai into “the world’s largest vehicle export hub” with a new factory capable of producing 450,000 electric vehicles per year, next to the existing plant.

Gigafactory Shanghai is a massive success for Tesla and enabled the automaker to grow at an impressive rate during the pandemic while the rest of the auto industry slowed down.

Last year, CEO Elon Musk disclosed that Gigafactory Shanghai has now surpassed Fremont Factory in production capacity, and Tesla has made the Chinese factory its new main export hub. The factory looked unstoppable, until it was shut down for most of last month due to serious COVID-19 restrictions in Shanghai.

Tesla finally managed to restart production a few weeks ago, and now we learned that it received significant help from the local authorities.

In a letter that Tesla sent to authorities on May 1 and obtained by Reuters, the automaker thanks local authorities in Shanghai’s Lingang Special Area for their help in transporting more than 6,000 workers and doing disinfection work to reopen Gigafactory Shanghai.

The city reportedly provided buses to help carry the employees to the workplace and operate in a “closed-loop” system with workers sleeping at the plant.

More interestingly, Tesla mentioned in the letter the new factory that they are building next to Gigafactory Shanghai and confirmed that they plan to build Model 3 and Model Y vehicles there. According to the letter,

The company will build a new plant on nearby land in the same area, which is poised to add an annual capacity of 450,000 cars, including Model 3s and Model Ys, becoming “the world’s largest vehicle export hub.

Back in February, there were several indications that Tesla planned to use the land next to Giga Shanghai to build either a brand new factory or a major expansion to the existing plant.

There’s no clear timeline for the expansion, but it looks like it will bring Tesla’s capacity in Shanghai to 1 million cars per year once completed.

Electrek’s Take

This is a wild expansion.

Along with Giga Shanghai, Tesla is also simultaneously planning a similar capacity in Berlin and Texas, but the company plans to also start with a capacity of 500,000 vehicles per year at each factory. We are talking about 1.5 to 2.5 million vehicles of annual production capacity to be added in the next two to three years.

That’s why I think Tesla is going to keep its lead in electrification for the foreseeable future. If it really can build the supply chain around that capacity, Tesla will have an EV production capacity of more than two million vehicles by the end of next year.