Tesla’s third Gigafactory took a step closer to reality on Monday, as CEO Elon Musk attended the ground-breaking ceremony for a new facility in Shanghai. The new plant will produce affordable versions of the Tesla Model 3 and Model Y electric cars exclusively for greater China, with Model 3 production at the facility expected to start as early as the end of 2019.
“This will be the most advanced Tesla Gigafactory in the world,” Musk told the audience at the Lingang industrial zone, with a team of officials including Shanghai mayor Ying Yong. “Arguably one of the most advanced factories in the world of any kind, perhaps the most advanced.”
The move is part of Tesla’s wider plan to make electric cars more affordable. The Tesla Model 3 and Model Y were listed in the company’s 2016 master plan as part of a broader strategy to expand the market and help accelerate the transition to sustainable energy. Musk commented on Twitter that affordable cars “must be made on [the] same continent as customers.”
The plan to mass-produce electric transportation is still in motion, with Tesla set to launch cheaper cars in more markets. The Model 3 sedan has set sales records since it entered production in July 2017, but the cheapest $35,000 version has yet to launch. Model 3s starting from $44,000 have been shipping out to North American consumers at faster speeds since the firm pulled itself out of “production hell” last summer, and the first Europe models are expected to arrive in February. Musk has said that this March may be the month Tesla will unveil the Model Y compact SUV, with production set to start in the first half of 2020.
Musk is aiming for a speedy start to production with this new factory, as Tesla aims to finish initial construction by the end of this summer, before producing the first Model 3s by the end of the year. The team expects to reach high volume production in 2020.
The new timetable is a notable revision from previous estimates. Tesla held preliminary talks with Shanghai’s municipal government about building a factory in the summer of 2017, before signing a cooperative agreement in July 2018. In its announcement of the signing, Tesla claimed it would take two years to complete the factory after permits are approved, and a further two to three years before the factory will reach a production rate of 500,000 cars per year. The municipal government granted Tesla a construction permit that started from December 29, 2018.
Shanghai joins a growing list of places hosting Gigafactories, with the Nevada plant producing batteries at speed and the Buffalo, New York facility building solar panels. Reports in July 2018 claimed that Tesla will add somewhere in Europe to the list soon, with Germany and the Netherlands cited as potential candidates.
Ahead of what’s shaping up to be a big year for Tesla in China, Musk also took a moment on Monday to enjoy his big day with a little dance on the stage. Whether he’ll be dancing at this time next year remains to be seen.
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