Tesla’s strategy of having a gigafactory on each continent where it sells vehicles appears to be sage as the EV maker plans to start shipping Model 3 sedans produced in its facility in Shanghai to Europe starting this month to meet demand.
The company is currently building a new manufacturing facility near Berlin, Germany, but demand is strong enough to begin shipping vehicles from China, where the company expects to build 150,000 vehicles this year. Tesla will ship vehicles to more than 10 countries, including Germany, France, Italy and Switzerland, the company said in a statement.
Exporting vehicles to Europe from Shanghai, which currently builds only the Model 3, would help the company reach its goal of delivering 500,000 vehicles this year, which remains unchanged from the EV maker’s original plan despite the impact of the coronavirus pandemic.
(Tesla CEO Musk cuts Model S price — for the second time this week.)
“We hope to serve global customers as a global factory,” said Song Gang, Tesla’s manufacturing director of the Shanghai gigafactory, according to Bloomberg News. “The export of China-built Tesla models is a key step in the global layout.”
The electric vehicle maker delivered more than 11,000 Model 3 cars last month in China. The Shanghai plant is, as mentioned earlier, set to produce 150,000 sedans, but it actually has a capacity of 200,000 vehicles so supplying Europe with more vehicles is possible, perhaps helping the company reach that 500K goal.
However, officials noted earlier this year that the company would ship vehicles from Shanghai to other Asian countries as well. That was expected to begin about now, and it wouldn’t limit those just Asian countries either, noting it would likely ship vehicles to Australia and New Zealand from its Shanghai factory.
(Tesla speaking truth about its power at Battery Day.)
Tesla’s been in a growth mode for some time. The plant in Germany – Giga Berlin – won’t be up and running until the middle of next year at the earliest. CEO Elon Musk announced several weeks ago that the company will build its next plant near Austin, Texas.
That will be the third auto factory the company runs in the U.S. The company’s original plant is a former General Motors facility in Fremont, California. The second is just outside Reno, Nevada. The California site builds the Model S, X, 3 and Y while the Nevada gigafactory produces batteries for those vehicles.
Must noted in the company’s last earnings call that Tesla would likely build a third gigafactory in the U.S. in the eastern half of the country. This would help reduce costs, he suggested, and make it easier to get vehicles to buyers on the East Coast. He didn’t say there were any site locations under review for this, but did say it wouldn’t be for another three years with production starting in about five years.
(Tesla CEO Musk tells employees that 500K target for 2020 is doable.)
Tesla will report its third quarter earnings on Oct. 21. It has posted four consecutive profitable quarters and analysts expect Q3 will be number five.
