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The company has announced that it is gaining foothold in the world's largest market for electric vehicles and is buying land for its new Shanghai plant.
"Securing this site in Shanghai, Tesla's first Gigafactory outside of the United States, marks a milestone for our next advanced and sustainably developed production site," said Robin Ren, Tesla's vice president of worldwide sales. , in a statement a signing ceremony in Shanghai on Wednesday.
The 210-acre site in eastern Lingang District, Shanghai, cost $ 140 million, according to a Shanghai government website retracing major land purchases in the city. Although he did not mention the name of Tesla, his description of a large sale of land concluded on Wednesday in Lingang almost certainly refers to the agreement with Tesla.
Tesla CEO Elon Musk signed an agreement in July with the local government to build a plant in Shanghai. Telsa will fully own the facility, which is expected to produce up to 500,000 cars a year by the end of the decade.
In a third-quarter production update this month, Tesla said it was "speeding up the construction of our Shanghai plant" in response to the US-China trade dispute. Vehicles built in the United States are subject to a 25% tariff introduced by China in July in retaliation for the new US car rates. The 25% adds to the 15% tariff imposed by China on all imported vehicles.
China is Tesla's second largest market after the United States; it sold about 17,000 cars there last year, compared to about 50,000 in the United States and 103,000 worldwide.
But the US-Chinese trade confrontation has led to an increase in the cost of vehicles imported by Tesla in China. Tesla cars cost 55 to 60 percent more in China than comparable electric vehicles built locally, according to the company.
After securing the land, Tesla aims for "rapid and efficient capital development, using many lessons learned from the Model 3 ramp in North America," the company said. Auto industry analysts say it will take two or three years for Tesla to start production in China.
-Chongying Zhang contributed to this article.
Write to Trefor Moss at [email protected]
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