Tesla won’t buy more land in Shanghai

Tesla is reported to have canceled plans to expand its Shanghai plant. Electric car makers initially aimed to buy land and set up a global export center for their products. However, tensions between China and the United States continue, and vehicles shipped to our market are virtually unprofitable to the company.

Automobiles exported from China are now subject to a 25 percent tariff issued under the Trump administration in retaliation for the Chinese Communist Party’s strict restrictions on foreign manufacturers. Tesla is one of the only existing companies that is not subject to a compulsory joint venture in China, The result is a fully owned factory, The company is still subject to tariffs on all vehicles shipped to the United States And recently, they have endured negative promotional campaigns in the area... China suddenly seems unfriendly to Tesla and is responding with the utmost care.

Asian countries have been struggling with Tesla lately, with a sudden interest in how automakers process data. The CCP sees this as a national security issue, primarily related to foreign brands and encourages businesses to work with the government to create data hubs. Consumer privacy is not really taken into account. However, it cannot be said that the data was the straw that broke the camel’s back. Like most executives and world leaders Elon Musk changed his mind and enjoys a long history that goes beyond promises..

Tesla opposed bidding on land adjacent to the Shanghai facility in March, even though the local government had made a deal with the landowner to sell the property to the automotive sector. Space is supposed to have gone to Tesla.But Reuters Reported that it may not have been the manufacturer’s intention — the automaker buys a 100-acre parcel that adds another 200,000 to 300,000 units to the factory’s annual capacity (Model 3 and Model Y). Sources that revealed that they have never officially declared that they want to) Cars.

However, those anonymous sources also claimed that the company was considering expanding exports of its Chinese-made Model 3 to include the United States. Now it looks like the car stays in Asia and a significant portion is allocated to Europe … at least until Tesla’s German facility is completed.

From Reuters:

A construction document posted on the government’s website in March shows that Tesla is remodeling its factory in Shanghai to add capacity.

Tesla’s Shanghai site still has land that was designed for production but is now used as a parking lot. One said Tesla could expand its capacity at existing sites by more than 500,000. Another said Tesla may acquire more land for more car production lines in the future.

Separately, Tesla is building facilities to repair and refurbish key components such as electric motors and battery cells, and is building EV chargers at its Shanghai plant.

The Shanghai government is in talks with several companies to sell land for commercial production of new energy vehicles, those who are directly aware of the issue said.

Given how strongly China wants to develop its domestic EV brand, it always seemed dangerous for Tesla to make a large investment there. I don’t know if it was over-promised in the hope that the government would cut it down to a particularly sweet deal, or if it simply didn’t feel comfortable with further investment because of political and economic conditions. However, the resulting land decision means that the commitment to China is slowly declining, despite the fact that sales are said to be fairly good. Tesla said it delivered 184,800 cars worldwide in the first three months of 2021 and returned a significant portion to Asia.

Of course, the company doesn’t categorize sales (transparency?) By region, so there’s no way to know exactly what role China has played. However, the Shanghai facility remains important, and Tesla says it is moving the site “as planned.”

[Image: B.Zhou/Shuterstock]

Tesla won't buy more land in Shanghai

Source link Tesla won't buy more land in Shanghai

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