The U.S. electric carmaker Tesla Inc. is moving swiftly to accelerate its production in China, as the company tries to reduce negative impacts on its sales in the Chinese market from tariffs amid a trade war between China and the U.S.
Tesla said that it would move portions of the Model 3 production to China in 2019 and fast-track other localization plans in a bid to reduce prices that have been significantly boosted by tariffs, the company said on Wednesday.
"In order to significantly increase the affordability of the Model 3, we have decided to accelerate our manufacturing timeline in China," the U.S. company said in a statement, adding that demand in China remains "challenging" due to a 40 percent import duty for imported models.
Although China has reduced tariffs on all imported cars to 15 percent, tariffs on cars imported from the U.S. have increased to 40 percent, according to Tesla. The increased tariffs on U.S.-made cars resulted from tariffs China imposed on U.S. products in countering U.S. tariffs on Chinese goods.
Tesla plans to produce the Model 3 and the Model Y cars in its first overseas Gigafactory in Shanghai, which could reach an annual capacity of 250,000 in the initial stage, according to an environmental report on the project in China released on Wednesday.
A screenshot of the report, compiled by the Shanghai DEBL Environmental Science and Technology Development Co, was posted by the news website jiemian.com.
Tesla reported a "historic" quarterly profit boosted by demand for its first mass market Model 3. Net income reached $312 million in the third quarter which ended on September 30, compared to a loss of $619.4 million during the same period last year, according to the company.