Tesla to begin delivering China-built Model 3 cars next week

Tesla will start making the first deliveries of its Shanghai-built Model 3 sedans on Monday, Bloomberg reports. The cars are rolling off the assembly line at the new Tesla Shanghai Gigafactory, which is operational but which also will be expanding in the future thanks to a fresh $1.4 billion injection in local funding reported earlier this week.

The Shanghai gigafactory’s construction only began earlier this year, and its turnaround time in terms of construction and actually producing vehicles is impressive. The Model 3 vehicles built in China will provide a price break versus imported vehicles, as cars made in-country enjoy exemption from a 10% tax applied to imported cars. Tesla Model 3s built in China also get a government purchase incentive of as much as $3,600 per car, which should drive even higher sales.

Tesla’s Shanghai factory is its first manufacturing facility outside of the country, though there’s also a gigafactory in the works in Germany just outside of Berlin, and Tesla has teased plans for at least a fifth gigafactory with a location to be revealed later.

Tesla’s production capacity in Shanghai probably isn’t very high-volume to begin with, although the company has said previously it was targeting a production rate of around 1,000 cars per week by year’s end, with potential to ramp up to around 3,000 cars per week. Tax breaks and incentives have helped demand for the Model 3 in China grow significantly in 2019, so any progress on production in-country is bound to help lift global vehicle sales.

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