Economy

Tesla to break ground on Shanghai 'Gigafactory'

Tesla to break ground on Shanghai 'Gigafactory'”

Elon Musk's fateful "420" pot joke on Twitter is dogging him in court again. It is manufactured in China on-Board computer for the new sedan Model 3, according to Tesla, the "brain of the vehicle".

But Tesla has said its Shanghai plant will be "wholly-owned" by the company.

While the ground-breaking event, scheduled for 3 p.m. local time at a site near the city, marks a new journey for Tesla, it comes at a point where China's economy is showing signs of strain amid the trade war with the U.S. The deadline of reduced tariff would end on March 2nd, and after that, the tariff on U.S. made autos on China would revert back to 40 percent, instead current 15 percent. The lower tariff will last until the end of March pending trade talks.

A local Chinese plant may be crucial for Tesla, which is struggling to stave off a potential dip in demand in the US, its biggest market, after reductions in federal tax credits for EVs.

Tesla signed a preliminary agreement with the Shanghai government previous year to build the 500,000-unit factory in the Chinese city. Picture: Yilei Sun / Reuters.

Also on August 13, 2018, Gizmodo published an article titled "Elon Musk Responds to Azealia Banks' Claims of Ghosting, Tweeting, and LSD: I Don't Know Her.". "All Model S/X & higher cost versions of Model 3/Y will still be built in U.S. for WW market, incl China", he later added, referring to the worldwide market including China.

"Shanghai Giga production of Model 3/Y will serve greater China region", Musk added in another one.

Alan Kang, Shanghai-based analyst for consultancy LMC Automotive, said: "Tesla's sales (in China) have dropped over the past few months because of high price caused by the tariffs. This is going to get extremely ugly.Elon will learn very soon who is more powerful of us two".

Musk tweeted ahead of the formal start of construction of the firm's first Chinese plant.

"With the construction of the Shanghai factory, the faster the better (for Tesla)", Kang said.

The facility is expected to churn out about 250,000 vehicles annually at first - the Model 3 and the planned Model Y - and that capacity will double over time.

China is the largest market for electric vehicles, and most forecasters predict EV sales in the country will accelerate rapidly as government regulation drives toward a goal of 100 percent electric vehicles by 2030.



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