Tesla secures land for first factory outside U.S.

  • Tesla secures land for first factory outside U.S.

Tesla secures land for first factory outside U.S.

According to Tesla, the Gigafactory in Shanghai is the first step towards a promising automotive market in China.

"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", Robin Ren, Tesla's vice president of worldwide sales, said in a statement.

USA imports targeted by Beijing's penalties include electric cars.

Electric vehicle maker Tesla has decided upon the location of its third Gigafactory, and has acquired the right to about 210 acres of land in Lingang, Shanghai.

Though it ran into a bit of a roadblock earlier this year due to US-China trade war tariffs, the company has been selling its vehicles in the country for some time, with quite a bit of success.

"Taking ocean transport costs and import tariffs into account, Tesla is now operating at a 55 percent to 60 percent cost disadvantage compared to the exact same auto locally produced in China", the company said.

Tesla has said production in Shanghai will begin two to three years after construction of the factory begins and eventually increase to 500,000 vehicles annually.

Analysts expect Tesla to report a loss of about $200 million for the three months ending September 30 after the previous quarter's $742.7 million loss.

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.

Chief executive Elon Musk said in a September 30 letter to United States regulators that the company was "very close to achieving profitability". The company is the first to benefit from a new policy allowing foreign carmakers to set up wholly-owned subsidiaries in China. Foreign brands baulked at bringing electric vehicle technology into China to avoid having to share it with potential future competitors.