Bloomberg has reported that Tesla will start delivering its made-in-China-built cars on Monday. A major milestone for Tesla as it mounts a push to expand in the world’s electric-vehicle market.
The first 15 made-in-China units of Model 3 sedans were assembled at Tesla’s new multi-billion-dollar Shanghai plant. The first made-in-China will be delivered to company employees on Monday.
Chief executive officer Elon Musk is counting on the China plant to help build on recent momentum for the company. In the world’s largest market both for EVs and autos in general. The Model 3 will compete with electric cars from local contenders such as NIO and Xpeng Motors. As well as global manufacturers including BMW and Daimler.
The Shanghai Gigafactory, which only broke ground at the start of this year, is a crucial test of Musk’s bid to keep his carmaker profitable. He has hedged his bets big on Chinese appetite for electric cars.
Musk has said he’s never seen a factory built so quickly
With Tesla’s volatile stock price and strained finances, investors will be watching closely how the ramp-up unfolds. The multi-billion-dollar investment will be a deciding factor to determine whether Tesla will be able to take on local competitors. And consequently fend off challenges by the likes of Mercedes-Benz, BMW and Audi.
The launch will also provide clues about Tesla’s ability to truly go global. The company is planning to follow up with a production facility in Europe. Where it is enjoying burgeoning sales growth in several markets.
Musk has predicted Tesla will make at least 1,000 cars a week in Shanghai by the end of the year. A volume the company’s original factory in California spent months trying to hit. Tesla has said a weekly rate of 3,000 is a target at some point.
Earlier on Friday, the China-built Model 3 was included on a list of vehicles qualifying for an exemption from a 10% purchase tax in the country. Tesla said in October the locally built Model 3 will be priced from about $50,000. Further helping Tesla, the China-built model this month qualified for a government subsidy of as much as about 25,000 yuan ($3,600) per vehicle.
The company may lower the price of the locally assembled sedans by 20% or more next year as it starts using more local components and reduces costs, people familiar with the matter told Bloomberg.