Tesla is already making moves towards developing the company’s first international Gigafactory, just three months after signing a cooperation agreement with the Shanghai Lingang Area Development Administration, according to a company release.
Furthermore, the company plans on accelerating the development and construction of the factory, though the timetable by which it plans to do so is unclear. What is clear is that Tesla plans for the factory to be able to produce 500,000 automobiles a year, including the engines and batteries for them.
While Tesla has not revealed the price paid for the plot of land, Reuters has reported that similar plots of land had sold for $140.51 million. This already-hefty price tag is just the beginning, as several billion more in investment is expected if the company follows through with its accelerated construction plan. It would appear that the company may not be alone in fronting the expected costs, as a release shared with pv magazine states “Per the cooperation agreement signed in July, both parties will focus on jointly promoting EV technology innovation and industry development, with the city of Shanghai providing support for Gigafactory 3.”
The plant is Tesla’s attempt at expanding its global market share, as well as establishing a foothold in the lucrative Chinese new-energy vehicles industry. This industry is comprised of fully-electric and plug-in hybrid cars and is growing rapidly in China, even as the traditional automotive industry has slowed, according to Reuters.
“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,” Tesla’s Vice President of Worldwide Sales Robin Ren said in Tesla’s official statement. “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.”
This is factory will join it’s brethren in Nevada and Buffalo, NY as Tesla’s third Gigafactory, though the one in Buffalo is a joint venture with Panasonic. Once running, the factory will effectively double Tesla’s global manufacturing, while also lowering manufacturing and labor expenses, shipping cost and shipping time. This decrease in overhead cost will allow Tesla to lower the price tag of their vehicles as the company tries to wedge itself into to the previously mentioned and growing Chinese new-energy vehicles industry.