(Commonwealth) _ In a move to further solidify its presence in the world’s largest electric vehicle market, Tesla has announced plans to build a new battery factory in Shanghai, China. The company’s CEO, Elon Musk, made the announcement during a recent visit to the country, stating that the new factory will be one of the largest of its kind in the world.
The new factory, which is expected to begin construction later this year, will be built in partnership with local authorities and is set to produce batteries for Tesla’s electric vehicles. According to Musk, the factory will have an initial production capacity of 10 GWh per year, with plans to eventually expand production to 100 GWh per year.
China has become a critical market for Tesla, with the country accounting for a significant portion of the company’s global sales. The decision to build a new battery factory in Shanghai is a clear indication of the company’s commitment to further expanding its presence in the country and capturing a larger share of the growing electric vehicle market.
“China is a very important market for Tesla, and we believe that the demand for electric vehicles will continue to grow rapidly in the years ahead,” said Musk. “The new battery factory will enable us to better serve our customers in China and around the world, while also contributing to the local economy and creating new job opportunities.”
The new battery factory will also help Tesla reduce its reliance on battery suppliers and improve the efficiency of its supply chain. The company currently sources batteries from a number of suppliers, including Panasonic, LG Chem, and CATL, but the new factory will allow Tesla to produce batteries in-house and reduce its dependence on external suppliers.
“By building our own battery factory in China, we will be able to better control the quality and cost of our batteries, while also improving our supply chain and reducing our dependence on external suppliers,” said Musk.
The decision to build the new factory in Shanghai was also influenced by the Chinese government’s policies aimed at promoting the adoption of electric vehicles. China has set a target of having 25% of all new car sales be electric vehicles by 2025, and the government has implemented a range of measures to encourage the adoption of electric vehicles, including subsidies, tax incentives, and the construction of charging infrastructure.
Tesla has been a beneficiary of these policies, with the company’s sales in China increasing significantly in recent years. In 2020, Tesla sold over 147,000 vehicles in China, making it the company’s largest market outside of the United States.
The new battery factory will also be a boost for the local economy, creating new job opportunities and contributing to the growth of China’s high-tech industry. The factory is expected to create thousands of new jobs, both directly and indirectly, and will help to further develop China’s battery and electric vehicle industries.
“The new battery factory will be a significant investment in the local economy and will create thousands of new job opportunities for people in the area,” said Musk. “We are committed to working with local authorities and partners to ensure that the factory is built to the highest standards and has a positive impact on the local community.”
The announcement of the new battery factory in Shanghai comes at a time of significant growth for Tesla, as the company continues to expand its production and sales around the world. The company recently reported record-breaking sales and profits in the first quarter of 2021, with revenue of $10.39 billion and a net income of $438 million.
The construction of the new battery factory in Shanghai is expected to begin later this year and will take several years to complete. Once operational, the factory will play a critical role in Tesla’s efforts to expand its production capacity and capture a larger share of the growing electric vehicle market in China and around the world.
