Electric vehicle maker Tesla (TSLA) plans to break ground on a new manufacturing plant in Shanghai, China as soon as next month (March) as it takes steps to more than double its production capacity.
Once the new plant is fully operational, Tesla will have the capacity to produce up to two million electric cars per year at its expanded Shanghai campus, the company's main global export hub. Tesla is trying to meet growing demand for its cars within China and in foreign export markets.
The new production plant will be based in the vicinity of Tesla’s existing production base in Lingang, Pudong New Area.
The expansion, if it goes ahead, would give Tesla production capacity in the world's largest auto market that is on a par with more established brands in China. Toyota Motor (TM), for example, produced 1.6 million vehicles in China last year. General Motors (GM) produced 1.4 million with its major Chinese partner SAIC Motor Corp.
Tesla’s existing Shanghai plant currently makes the Tesla Model 3 sedan and the Model Y crossover vehicle. Tesla has projected to take its weekly production to about 22,000 vehicles at the plant in the coming months.
Tesla sales have surged in China and its Shanghai factory has become a crucial export hub to markets such as Germany and Japan. Last year, Tesla's China-made cars accounted for around half of the 936,000 vehicles it delivered globally.
Earlier this month, Tesla said its China revenue more than doubled in 2021 to $13.8 billion U.S. from the previous year. Elon Musk also said in October that Shanghai had surpassed its Fremont, California factory, the company's first manufacturing plant, in output.
