Tesla's Shanghai Gigafactory Ready for Production in Record Time
Tesla said its Shanghai factory was about 65% cheaper to build than its Model 3 production line in the U.S.
Tesla Inc. (Nasdaq: TSLA) has completed the Shanghai Gigafactory in record time and this week posted impressive financials for the third quarter.
The company said in a statement that it began producing vehicles on a trial basis in Shanghai, including the body, the painting and general assembly in its earnings report for the third quarter. Tesla also said it is working on getting the manufacturing license from the local government and expected China to be the key market for the sales of its Model 3.
"Gigafactory Shanghai was built in 10 months and is ready for production, while it was ~65% less expensive (capex per unit of capacity) to build than our Model 3 production system in the US," Tesla wrote in its report on Wednesday.
Within 168 working days after getting permits, the Gigafactory was hooked up to electricity, as state-run Xinhua news agency reported.
The installed annual capacity for Model 3 in Shanghai Gigafactory will be 150,000, according to the report. Its target is rolling at least 1,000 Model 3s off the production line weekly by year's end, Reuters said. The plant, worth $2 billion, was constructed from January to September, gaining the critical government approval last month, Reuters reported.
Amid the ongoing trade tensions between China and the United States, Tesla may face rising tariffs when importing to the U.S. However, the move to Shanghai allows the automaker to avoid China's 25% tariffs on U.S.-made vehicles, as CW financial analyst Yaning Ying, wrote in a report earlier this month.
The electric car maker reported third-quarter revenue of $6.3 billion and a net income of $143 million.
Shares in Tesla closed at $328.13 per share on Friday, up more than 9% on the day.