Tesla gets land for Shanghai factory in 'solid step' toward production
U.S. electric car producer Tesla Inc has acquired a site in Shanghai for a factory only three months after signing a deal with city authorities, the company said.
The move is a clear indication that China is opening its market to all foreign companies if they can offer great products needed by the country, analysts said.
The site, measuring 864,885 square meters, is located in the Lingang Area. The transaction is a solid step in Tesla's efforts to build a facility to produce the Model 3, according to a statement emailed to the Global Times on Wednesday.
The land was apparently sold for 973 million yuan ($140.5 million), as last shown in a land transaction website, according to domestic news portal thepaper.cn on Wednesday.
"The Shanghai plant will be Tesla's first Gigafactory overseas," said Ren Yuxiang, vice president at Tesla. The company has three production bases in the U.S., known as Fremont, Gigafactory 1 and Gigafactory 2.
Tesla signed the agreement with the Shanghai municipal government in July, one of the largest foreign-invested manufacturing projects in the city's history. The overall project includes a factory with a planned annual capacity of 500,000 electric cars, and an electric vehicle research and development center.
"Tesla's swift landing in Shanghai showed that China's opening-up is on a steady course and China is opening to all companies, including American companies, despite the trade war," said Liu Jianying, an associate research fellow at the Chinese Academy of International Trade and Economic Cooperation of the Ministry of Commerce.
According to Tesla, it produced a record 80,142 units in the third quarter.
Tesla has been enjoying rapid sales growth in China in recent years, along with the Chinese government's push for a greener environment, and its products are free from purchasing and traffic restrictions faced by gasoline-powered cars in key Chinese cities including Shanghai, Hangzhou in East China's Zhejiang Province and Shenzhen in South China's Guangdong Province.