Fast on the heels of Tesla's plan to start delivering Model 3 electric cars to customers in China, CEO Elon Musk traveled to Shanghai to break ground for the company's first large-scale plant outside the U.S., which he says could be building cars by year-end.Work on "Gigafactory 3," being built on an 860,000-square-meter site Tesla acquired last year for about $140 million, gets under way as the Palo Alto, California-based company needs a local production base for the Model 3 and a future Model Y crossover to avoid China's steep tariffs on imported vehicles. Construction is set to move much faster than is typical for new auto-assembly plants, with Musk tweeting that the first stage of construction should be done in the second half of 2019.
"Aiming to finish initial construction this summer, start Model 3 production end of year & reach high volume production next year," the billionaire entrepreneur said. "Shanghai Giga production of Model 3/Y will serve greater China region ... not North America. Affordable cars must be made on same continent as customers."
Aiming to finish initial construction this summer, start Model 3 production end of year & reach high volume production next year— Elon Musk (@elonmusk) January 7, 2019
Tesla reached an agreement with Shanghai government officials in July 2018 on plans for a factory capable of producing up to 500,000 vehicles a year and estimated to cost at least $2 billion to build. Spurred by government policies aimed at accelerating consumer purchases of less-polluting cars and trucks, China has become the world's biggest market for both conventional autos and EVs, and Tesla's production there could eventually rival its U.S. volume if the company can sell its products at more affordable prices.