As the United States and China resume fraught negotiations on trade issues, Tesla has begun building a new manufacturing facility for its electric cars in Shanghai. And as Tesla’s gigafactories feature battery manufacturing as a core aspect, this factory is expected to make lithium-ion batteries as well – although the company has said nothing about this aspect including the capacity that is expected.
The electric vehicle (EV) maker had asked U.S. President Donald Trump not to apply a special duty of 25% to its Chinese-made onboard computer for the company’s new Model 3. President Trump responded by imposing tariffs on Chinese goods, prompting Beijing to slap counter duties on U.S. imports.
The first hints we got of the new factory is when Shanghai authorities announced that Tesla had secured land for the factory in the October. The factory is Tesla’s first outside the United States. On Monday, the foundation stone for the new production plant was laid in the presence of Tesla CEO Elon Musk and Shanghai Mayor Ying Yong.
Musk announced on Twitter that he expects construction to be completed in the summer and production of the Model 3 to start by the end of the year. According to Musk only the lower-priced models 3 and Y will be made at the Shanghai factory, and these vehicles will be sold in China. Higher priced models will continue to be produced in the United States, including those intended for the global market.
According to Bloomberg, Tesla’s new factory will cost around $5 billion. With a planning stage that stretched to four years behind it, the city government in Shanghai said the factory is the largest foreign investment ever made in its territory.