Work is well underway on Tesla’s third Gigafactory. Construction for the Shanghai plant, the first based outside of the United States, started earlier this month after a ground-breaking ceremony attended by CEO Elon Musk. Drone footage from Twitter user “vincent13031925” released Thursday shows the company is wasting no time, with heavy machinery ready in place at the site.
The factory is set to play a key role in Tesla’s goal to reach a broader market and reduce the price of its electric vehicles. The Shanghai facility will produce affordable versions of the Tesla Model 3, the company’s cheapest-ever car that first entered production in July 2017, and versions of the upcoming Tesla Model Y compact SUV. Musk commented on Twitter after the ground-breaking ceremony that affordable cars “must be made on [the] same continent as customers.” The new factory will be no slouch, though, with Musk describing it as “the most advanced Tesla Gigafactory in the world…arguably one of the most advanced factories in the world of any kind.”
Tesla has rapidly expanded its production lines over the past year, and this next phase of international expansion could push its capabilities further. It delivered 83,922 cars in 2016, jumping to 101,072 cars in 2017 as the Model 3 entered production, exploding to 254,530 cars in 2018 as production ramped up. In the second half of 2018, Tesla sold 119,000 Model 3s in the United States, claiming the fifth spot in U.S. sedan sales and the number one spot when measured by revenue.
The Model 3 is now set to leave North America and reduce further in price. Tesla started off by producing versions starting at $49,000, introducing a $46,000 model in October 2018, and has previously stated plans to release a $35,000 model. At the start of this year, Tesla registered the first major batch of Model 3s for the European market. Musk claimed in the company’s third-quarter earnings call that he believes worldwide Model 3 demand could reach “probably in the order of anywhere from 500,000 to one million cars a year.”
Tesla is aiming for a speedy timetable with the Shanghai Gigafactory. It plans to finish initial construction by this summer, before the first Model 3s roll off the production line by the end of 2019. The team is aiming for high volume production by 2020.
With Musk stating that the Shanghai facility is part of Tesla’s plan to build cars closer to consumers, it may not be long before the firm starts moving on plans to build Gigafactories on other continents.