Car News

Tesla Building New Plant in China

In the midst of ramping up production at its California plant, Tesla has reached an agreement to bring massive production of the company's electric cars to China.

The Shanghai government and Tesla CEO Elon Musk have sealed the deal to bring the electric automaker's second assembly plant to China, Bloomberg reports. It's a big part of a long-term effort to bring the plant to the country and the report says that Tesla's facility will be the first in China to be wholly owned by a foreign carmaker.

Construction of the facility is expected to start as soon as approvals and permits are secured. The first vehicles are expected to roll out of the plant within about two years. Once that happens, a Tesla spokesperson told Bloomberg that it expects another two to three years for the plant to meet maximum capacity. Around 500,000 vehicles per year.

For a size comparison, Tesla's Freemont, CA, facility has just managed to reach 1,000 cars per day. Although that plant required an outdoor expansion to hit those figures.

Tariffs in China make Teslas expensive in that country. A Model S in China starts at around 710,600 yuan, which is approximately CAD $141,000. For comparison, a Model S in Canada starts at $96,650. The Chinese market is the largest EV market globally, with sales possibly hitting 1 million vehicles this year.

Musk has said he expects to reveal plans for another plant in Europe later this year, but no timeline was attached. Musk said that the China plant will likely build the Model 3 and upcoming Model Y crossover, rather than the pricey Model S and Model X.