Tesla Model S and Model X

Tesla was officially added to a government list of approved automotive manufacturers, said China’s Ministry of Industry and Information Technology recently.

The American electric vehicles manufacturer was granted permission in the form of a certificate which allows it to start the production at Tesla Gigafactory 3 as and when it’s ready. The 9,300,000 sq ft facility’s construction has not been completed yet but targets year end. This will be the company’s first full scale manufacturing plant outside of the US. Tesla already has more than 20 stores operational in China and plans to make it big in this country, whose demand for electric vehicles is the greatest in the world. In 2018, an estimated 1.2 million EVs were sold in China.

The $2 billion factory is expected to produce at least 1000 Model 3 customer cars a week, with later getting into producing the Model Y SUV. Company expects production volume to be around 500,000 cars per year, with a target of 150,000 cars per year in the first phase, starting manufacturing by the end of 2019 as per a report by Reuters. “We aim to start some production in October, but the actual production volume depends on many factors including car orders we received, performance of newly hired workers, supply chain and so on,” a Tesla source told the Reuters.

This facility is Tesla’s wholly owned subsidiary and received important support from the government along the way. Earlier in September this year, Elon Musk managed to exclude Tesla models from a 10% car purchase tax. Authorities in Shanghai have also offered Tesla help to speed up construction of the plant. Tesla is also able to sideline US-China trade war with this deal and avoid heavy imports on American cars.