Tesla is expanding to China. During the company’s third-quarter earnings call on Wednesday, Elon Musk said that Tesla is planning to build a factory in China which will start producing cars in 2020. The new factory will focus on production of Model Y and Model 3 in China.
Tesla is planning to expand in Asian markets and it will start producing cars in China in 3 years. Tesla struck a deal with Shanghai’s government to set up its own manufacturing unit in the city. According to Elon Musk, the factory in China will be able to produce “hundreds of thousands” of cars per year. As mentioned, the new factory will focus on Modey Y and Model 3 and possibly, the company will also be selling the cars in other countries of the same region.
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Tesla 3 is the company’s first mass-market car and the demand for the car has been very high. The car starts at $35,000 and the demand is so high that company is still struggling to deliver all the orders made more than a year back. Model Y is the company’s upcoming SUV which it plans to release by 2020 and of course, it will also be electric.
Producing cars in China will not only speed up the production, it will also make them more affordable for Asian markets. “It’s really the only way to make the cars affordable in China,” said Elon Musk on Wednesday.
Moreover, according to a Forbes, Tesla needs China more than China needs Tesla. That’s because China surpassed the USA as the world’s largest vehicles market in 2009. So a car manufacturer’s focus on world’s largest cars market makes obvious sense. Moreover, production in China is always a lot more affordable than the production in the United States.