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You're here, New York, New York, United States. Model 3 to customers beyond North America. And part of that plan involves accelerating its manufacturing plans in China.
You're here $ 3,000 in the third quarter (and $ 312 million in profit), with sales of new models and more recent issues with delivery logistics. The company was able to achieve profitability milestone in the U.S. and Canada. That leaves two other massive markets on the table. Cue Europe and China.
Tesla said Wednesday it will start to take orders for the Model 3 in Europe and China before the end of 2018. Tesla said it will begin deliveries of the Model 3 to Europe early next year.
"The mid-sized premium sedan market in Europe is more than as big as the same segment in the U.S.," Tesla said in its shareholder letter released Wednesday. "This is why we are excited to bring Model 3 to Europe early next year."
Notably, the company is going to be accelerating its timeline for China and said it will bring portions of Model 3 production to the country next year.
"We are aiming to bring portions of Model 3 production to China during 2019 and to progressively increase the level of localization through local sourcing and manufacturing," Tesla said in its earnings report. "Production in China will be designated only for local customers."
Tesla said earlier this month it plans for a rapid build of a factory in China. But there's something new here. The term "portions of Model 3 production" is the important phrase. this Could be referring to a term used in the manufacturing world. CKD is basically a kit of non-assembled parts of a product, like say a Model 3. It's a strategy used to avoid tariffs when shipping to foreign countries.
Tesla has plans to build a factory in Shanghai, but has not yet begun yet.
The company is located in Lingang, Shanghai, the site of the automaker's planned factory and its first outside of the U.S.
Tesla warned in its production and delivery in early October that tariffs, combined with the cost of shipping via ocean carriers and the lack of access to cash incentives, has been reduced to a disadvantage in China. Tesla reiterated those costs in third-quarter earnings report.
Tesla reached a deal in July with the Shanghai government to build a factory that it says will be capable of producing 500,000 electric vehicles a year. Once construction begins, it will take two years until Tesla can produce vehicles. It will be another two to three years before the factory is fully ramped up to 500,000 vehicles per year for Chinese customers, "Tesla spokesman said at the time.
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