Tesla aiming for a second factory in China

According to Reuters, Tesla will build a new factory in Shanghai, doubling its capacity to nearly 1 million electric cars per year in China.

In 2021, Tesla entered the world of major automobile manufacturers. With its 936,000 vehicle deliveries, it surpasses Volvo (700,000 vehicles) and records double Jaguar-Land Rover (421,000). It even approaches historic brands like Mazda and Mitsubishi (1.05 and 1.07 million units).

In this figure, up 88% compared to 2020, Elon Musk can thank his Chinese factory. Because the local “Gigafactory” in Shanghai produced 484,000 Model 3s and Model Y’s, which is more than half.

Goal of 2 million cars

However, this does not meet the demand. According to Reuters, a second Tesla factory in Shanghai is in preparation. Its construction could even begin as early as March.

With the support of this new Shanghai Gigafactory 2, seen as an extension, Tesla would be able to produce 2 million electric cars per year. This includes supporting the other two factories currently in approval. The Berlin Gigafactory (Germany) will assemble the Tesla Model Y SUV, as will the Austin Gigafactory in Texas (USA), which will also host the Cybertruck pickup in 2023.

Each factory has a production capacity of 500,000 vehicles. To this, add the 450,000 in China and the 600,000 at the Fremont facility. To reach 2 million, the annual output of the new Shanghai factory will thus be around 450,000 cars.

New factories for 2024 and 2025?

Is this new factory a surprise? Not at all if we consider Elon Musk’s ambitions. The Tesla CEO had laid out a growth plan of 50% per year. Based on the 500,000 cars produced in 2020, he is already ahead in 2021 with an +88% increase.

But looking at 2022, where he plans to sell 1.12 million Teslas theoretically, and 1.69 million in 2023. For next year, a new factory is thus necessary to reach this goal. And other factories will follow to meet targets of 2.5 million in 2024 and 3.8 million in 2025.

Nothing official is on the table yet, although rumors have already mentioned India, South Korea, Japan, or Indonesia. But Musk confirmed that another factory will exist in Asia outside of China as early as 2020, on his favorite media platform, Twitter.

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