Home > News content

Why did Tesla invest heavily in building factories in China? Reduce costs and the market is too big

via:新浪科技     time:2018/8/2 19:01:11     readed:334

The policy has driven the sales of electric vehicles. For buyers, it is easier to purchase electric vehicles and get subsidies. Bloomberg New Energy Finance predicts that while other countries are making progress, China will remain at the forefront until at least 2040.

Tesla was criticized by investors because of the excessive burning of money and unclear profitability. On Wednesday, Tesla revealed that it would raise funds through local debt to build factories near Shanghai. This is Tesla’s The first factory built outside the United States.


The new factory is called Gigafactory 3. In the early stages, it is estimated that the plant can produce 250,000 cars per year and also produce batteries, which will double in capacity in the future. The first car produced at the new plant is estimated to be off the assembly line within three years.

People familiar with the matter said that if the new plant is to be fully operational, the cost is estimated to be as high as $5 billion. At the meeting on Wednesday, Musk responded that if the factory produces 250,000 cars a year, it needs to invest nearly $2 billion.

Nannangu, a senior manager at Bloomberg Energy Finance in Beijing, said China's decision to move towards electricalization, with a huge market, would surely spur the global popularity of electric cars. "with China actively promoting electric vehicles, global automakers are moving the electric vehicle development schedule forward by six to seven years," he added.

It is not only Tesla that is desperately running, but global giants such as General Motors, Toyota and Volkswagen have also invested heavily in new energy vehicles, but in the Chinese market, they are one step behind. Hundreds of local Chinese companies also want to share a piece of cake. China plans to sell 7 million new energy vehicles by 2025. According to data provided by the China Automobile Association, the annual sales volume of new energy vehicles in China is about 777,000. .

Producing cars in China is crucial for Tesla, and this will not only help Tesla to gain a foothold in China, but also reduce costs. There has been no truce in the Sino-US trade war, and auto tariffs have increased. It is even more necessary to build factories in China. Due to China's high tariffs on US-made cars, Tesla Model S and Modle X have increased their prices in China by up to $30,000. After the price rises, Tesla may be rejected by the Chinese middle class.

The good news is that in China's big cities, the demand for electric vehicles is getting higher and higher, because the control of gasoline vehicles in the big cities is more stringent. Consumers in Beijing, Shanghai, Guangzhou and other places are more affluent, they may be more willing to buy Tesla cars, with the introduction of the cheaper Model 3, the willingness to buy may be stronger.

Last month, Musk flew to Shanghai and signed a preliminary agreement with the Shanghai government to set up a factory in the local area. In a letter to shareholders, Tesla said that although the construction work will start in the next few quarters, the big investment will wait until next year.

China IT News APP

Download China IT News APP

Please rate this news

The average score will be displayed after you score.

Post comment

Do not see clearly? Click for a new code.

User comments

Related news