Tesla’s ambitions just keep on skyrocketing, just like Elon Musk’s SpaceX program. Tesla is set to open Gigafactory 3 in China. This will be the electric vehicle manufacturer’s first factory outside American soil.

Tesla has bought 210 acres of land in the Lingang District in Shanghai. Top Chinese officials and administrators from Lingang District’s government were present at the agreement-signing ceremony on Wednesday.

These included Shanghai Lingang Group, leaders of the Shanghai Economics and Information Committee and Shanghai Lingang Area Development Administration along with top executives from Tesla.

Tesla’s vice president of Worldwide Sales Robin Ren said, “Tesla’s mission is to accelerate the world’s transition to sustainable energy not only through all-electric vehicles but also scalable clean energy generation and storage products.”

Also Read: Tesla Factory Caught On Fire

Ren further added, “Securing this site in Shanghai, Tesla’s first Gigafactory outside of the United States, is an important milestone for what will be our next advanced, sustainably developed manufacturing site.”

The biggest motivator in this step was money. Tesla wanted to save costs so it quickened the process of acquiring the land. Rising costs and increased tariffs forced the company to construct the Gigafactory 3 as quickly as humanly possible.

This strategy feels a bit hectic too since, in early October, Tesla highlighted in its production and delivery report in that shipping costs, tariffs and lack of financial investment from locals might put the company in a chokehold in China.

Tesla reassured its investors in Wednesday’s statement that the company has learned its lessons and that the construction of Gigafactory 3 should be an economically beneficial and smooth process.

According to the electric vehicle company, it had learnt a lot during the time of manufacturing Tesla 3. So it seems the Gigafactory 3 will be a profitable investment. This deal was made with the officials from Shanghai back in July.

The company boldly claimed that Gigafactory 3 will be able to produce half a million electric cars in a single year. It will take Tesla about 2 years from the day of construction to be in a position to manufacture cars.

It will take another 2 years before the company will be able to mass-produce 500,000 vehicles in a year for Chinese customers.

This deal marks a symbolic victory as well. This deal means that China is looking to improve its ties with the US, and is more than happy to welcome foreign investors.

Foreign companies had a 50-50 share in the past, 50 percent was owned by them while the other half was owned by a local Chinese partner.

This deal marks a massive step in the history of China, as Chinese government will allow foreign investors to completely own and operate their factories within the country.
Xi Ping the President of China has stated that by 2022, the government will allow foreign car manufacturers to solely run their operations within the country and join ventures will be abolished.

Gigafactory 3 will allow everything from research and development to sales and manufacturing. This is a big deal for Tesla and an even bigger deal for US-China ties.
Whether it was Musk’s intentions or not, he has brought the two countries together, that’s for sure.

Avatar for Fazeel Ashraf

IT graduate from Pakistan’s National University of Science and Technology with a passion for writing. When not reading or writing, I can be found listening to rock and metal or playing some classic jams on my electric guitar. I’m also a big fan of horror movies.

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