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Gigafactory Shanghai ( zh, c=特斯拉上海超级工厂, l=Tesla Shanghai Super Factory) (also known as Giga Shanghai, or Gigafactory 3) is an automobile manufacturing plant in
Shanghai Shanghai, Shanghainese: , Standard Chinese pronunciation: is a direct-administered municipality and the most populous urban area in China. The city is located on the Chinese shoreline on the southern estuary of the Yangtze River, with the ...
, China, operated by
Tesla, Inc. Tesla, Inc. ( or ) is an American multinational automotive and clean energy company. Headquartered in Austin, Texas, it designs, manufactures and sells battery electric vehicles (BEVs), stationary battery energy storage devices from h ...
Construction of the plant began in January 2019, initial production started in October, and the first production vehicles rolled out of the factory in December 2019, less than one year after groundbreaking. The main plant currently manufactures the Model 3 and Model Y. , Tesla says the factory has the capacity to build over 750,000 vehicles per year and is the primary production site for Tesla vehicles exported to regions without a Gigafactory. Unique among foreign automakers in China, the plant is wholly owned by Tesla and not operated as a joint venture with a Chinese company, the first time the government had allowed such an arrangement. While Tesla owns the factory, it does not own the land it is built on, as is typical in China. Tesla has land use rights with an initial term of 50 years.


History


Background and land purchase (2018)

Tesla Shanghai Co., Ltd., a subsidiary of the electric automaker, was formally established 8 May 2018. In July 2018 Tesla CEO
Elon Musk Elon Reeve Musk ( ; born June 28, 1971) is a businessman. He is known for his leadership of Tesla, SpaceX, X (formerly Twitter), and the Department of Government Efficiency (DOGE). Musk has been considered the wealthiest person in th ...
signed an agreement with the Shanghai regional government to build its third Gigafactory, and the first in
China China, officially the People's Republic of China (PRC), is a country in East Asia. With population of China, a population exceeding 1.4 billion, it is the list of countries by population (United Nations), second-most populous country after ...
. In part due to the good relationship Musk had built with the government, it was permitted to be structured as a wholly owned subsidiary of Tesla and not operated as a joint venture with a Chinese company, the first time the government had allowed such an arrangement for a foreign automaker. While Tesla owns the factory, it does not own the land it is built on, as is typical in China. The government granted Tesla land use rights with an initial term of 50 years. To finance the plant, Tesla received in loans from Chinese banks at favorable interest rates, and in grant funding. The local Shanghai government granted Tesla a corporate income tax rate of 15% for 2019 through 2023, compared to the typical 25% rate in China. Having a factory in China also allows the company to avoid tariffs on vehicles imported from the U.S. In exchange for the land grant and government support, Tesla was required to spend in capital expenditures per (per ) by the end of 2023, equating to a total minimum investment of (). The factory is also required to generate of annual tax revenues starting at the end of 2023. On 8 August 2018,
compulsory purchase Compulsion, Compulsive, Compelling, or Compulsory may refer to: Psychology * Compulsive behavior, a psychological condition in which a person does a behavior compulsively, having an overwhelming feeling that they must do so. * Obsessive–compu ...
order Shanghai 018 was issued by Pudong New Area Planning and Land Administration, with a closing date for objections of 14 August 2018, and finalization scheduled to occur on 20 August 2018. On 26 September 2018, the bidding process for the newly acquired plots Q01-05 in the area designated as 04PD-0303 were advertised, with the restriction that the land be used for
electric car An electric car or electric vehicle (EV) is a passenger car, passenger automobile that is propelled by an electric motor, electric traction motor, using electrical energy as the primary source of propulsion. The term normally refers to a p ...
manufacturing, with a minimum investment requirement. The bidding process ran between 17‒26 October 2018, with the proviso that if there was only one bidder meeting the requirements by 11:30 on 17 October 2018, then the process could be closed and finalized early. Tesla won the long-term lease for of land in Lingang,
Shanghai Shanghai, Shanghainese: , Standard Chinese pronunciation: is a direct-administered municipality and the most populous urban area in China. The city is located on the Chinese shoreline on the southern estuary of the Yangtze River, with the ...
on 17 October. Tesla (Shanghai) was the only bidder, with its bid of 973 million
Chinese yuan The renminbi ( ; currency symbol, symbol: Yen and yuan sign, ¥; ISO 4217, ISO code: CNY; abbreviation: RMB), also known as the Chinese yuan, is the official currency of the China, People's Republic of China. The renminbi is issued by the Peop ...
for the 50-year lease covering the site, with the capital coming from local Chinese banks. The Shanghai Land Transfer contract with Tesla (Shanghai) required construction work to begin within 6 months, and be completed within 30 months, with production started after 36 months, and full minimum tax revenues being paid after 60 months. The Land Transfer was scheduled to occur on 12 December 2018, and limits the with a maximum height of . Up to of the area can be used for non-production office buildings. Phase 1 of the project will manufacture
Tesla Model 3 The Tesla Model 3 is a Battery electric vehicle, battery electric powered Mid-size car, mid-size sedan with a fastback body style built by Tesla, Inc., introduced in 2017. The vehicle is marketed as being more affordable to more people than pr ...
and
Tesla Model Y The Tesla Model Y is a Battery electric vehicle, battery electric compact crossover SUV produced by Tesla, Inc. since 2020. The vehicle was presented in March 2019 as the company's fifth production model since its inception after the Tesla Road ...
cars, with a target production rate of 250,000
electric car An electric car or electric vehicle (EV) is a passenger car, passenger automobile that is propelled by an electric motor, electric traction motor, using electrical energy as the primary source of propulsion. The term normally refers to a p ...
s per year. Tesla stated that it planned to eventually be able to produce 500,000 electric vehicles per year at the site. The public environmental impact consultation for Phase 1 of the project was opened on 24 October 2018, and scheduled to run for ten working days.
Capital expenditure Capital expenditure or capital expense (abbreviated capex, CAPEX, or CapEx) is the money an organization or corporate entity spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land. It is considered ...
s covering the land purchase and initial design costs for were scheduled to occur in the fourth quarter of 2018. The purchase was aided by a loan from Chinese banks, and converted to a $1.4 billion loan in late 2019, also by Chinese banks.


Construction and delivery (2019)

A construction permit was granted by the Shanghai municipal government authorizing work to begin after 29 December 2018. The project contractor is China Construction Third Engineering Bureau Co., Ltd., part of
China State Construction Engineering The China State Construction Engineering Corporation (CSCEC; ) is a Chinese state-owned construction company headquartered in Beijing. It is the largest construction company in the world by revenue and the 8th largest general contractor in terms ...
, a large state-owned construction company. The factory site is in the Lingang Industrial Zone within the
Pudong Pudong is a list of administrative divisions of Shanghai, district of Shanghai located east of the Huangpu River, Huangpu, the river which flows through central Shanghai. The name ''Pudong'' was originally applied to the Huangpu's east bank (g ...
district of Shanghai, with the western edge bordering the Fengxian district. By December 2018, construction activity at the site was underway with site grading. Shanghai Mayor
Ying Yong Ying Yong (; born 17 November 1957) is a Chinese politician and lawyer who is currently serving as the procurator-general of the Supreme People's Procuratorate. Ying came to prominence beginning in 2003 in Zhejiang province, and served as the p ...
visited the site on 5 December. A subsidiary of
China Minmetals China Minmetals Corporation is a Chinese state-owned enterprise headquartered in Beijing. It is one of the largest metal and mineral trading companies in the world, operating in more than 30 countries across mining, metal trading, engineering ...
was making preparations for piling foundations.
Shanghai Construction Group Shanghai Construction (Group) Corporation (SCG) is a Chinese construction and engineering company, ranked as the 16th largest construction company in the world based on 2011 revenues. The group's listed arm Shanghai Construction Group Co., Ltd. ...
was one of the companies bidding for part of the larger construction contract. On 7 January 2019, the groundbreaking ceremony was held. By March, foundation work in some areas of the large facility was in place and
structure A structure is an arrangement and organization of interrelated elements in a material object or system, or the object or system so organized. Material structures include man-made objects such as buildings and machines and natural objects such as ...
is being erected, with crews operating at the site on multiple shifts to accelerate construction. By early August 2019, the building exteriors were nearly complete, and the general assembly building was being fitted with manufacturing equipment, with a target to begin production in November. The plant received its "comprehensive acceptance certificate" on 19 August. In the 3Q2019 quarterly investor call on 23 October 2019, Tesla reported that it is ahead of schedule with getting the factory into production. Moreover, it was built in just ten months, is ready for production, and was built for approximately 65% less
capital expenditure Capital expenditure or capital expense (abbreviated capex, CAPEX, or CapEx) is the money an organization or corporate entity spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land. It is considered ...
per unit of manufacturing capacity than had been the Model 3 production system in the US.
General assembly A general assembly or general meeting is a meeting of all the members of an organization or shareholders of a company. Specific examples of general assembly include: Churches * General Assembly (presbyterian church), the highest court of presby ...
of the initial
Tesla Model 3 The Tesla Model 3 is a Battery electric vehicle, battery electric powered Mid-size car, mid-size sedan with a fastback body style built by Tesla, Inc., introduced in 2017. The vehicle is marketed as being more affordable to more people than pr ...
s was operating by October 2019, with 30% of the car coming from China.


Expansion (2021)

In April 2021, local reports have noted that preliminary work on the new site south of the main complex has been going on for some time. Tesla was the sole bidder for the land, and while the bidding process Gigafactory produced vehicles and the Model Y at a rate of about 450,000 cars per year, the expanded site is already being prepared for construction. Expansion of Giga Shanghai was briefly halted in 2023 after the
Chinese central government The State Council of the People's Republic of China, also known as the Central People's Government, is the chief administrative authority and national cabinet. It is constitutionally the highest administrative organ of the country and the e ...
expressed concerns with Elon's activities at
SpaceX Space Exploration Technologies Corp., commonly referred to as SpaceX, is an America, American space technology company headquartered at the SpaceX Starbase, Starbase development site in Starbase, Texas. Since its founding in 2002, the compa ...
, in particular the quickly expanding military applications of Starlink and its potential impact on global strategic defense.


Production

Giga Shanghai currently does final assembly of Model 3 vehicles which began in December 2019, with expectation to begin Model Y final assembly later in 2020. While initially, assembly is accomplished with parts and subassemblies that are shipped into the factory from the US, a major push during 2020 will be to gradually increase the "Made in China" (MIC) content in the car as Tesla China manufacturing matures. , MIC Model Y production is slated for January 2021. Production line capacity of Giga Shanghai is aimed at 5,000 cars per week, and if achieved and sustained could result in an annual capacity of more than 250,000 vehicles. Once the factory has been fully built out and production has fully ramped, Tesla plans for the factory to reach an annual production capacity of about 500,000 vehicles for Chinese consumers. Transport truck trailer rigs moved cars out by early December 2019, and the first 15 cars from the new factory were delivered on 30 December 2019, to Tesla employees. The first cars to be produced at the Gigafactory and delivered to Chinese customers were delivered on 7 January 2020. Production rate was approximately 1,000 cars per week in early 2020, made by a single shift of workers with a total production line capacity of 2,000 cars per week when Saturday overtime is included. The Gigafactory Shanghai was temporarily shut down for approximately two weeks by order of the government on 29 January 2020, due to the
COVID-19 pandemic The COVID-19 pandemic (also known as the coronavirus pandemic and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...
."Tesla says China has ordered its Shanghai factory shut down over coronavirus fears", The Verge, 29 January 2020, https://www.theverge.com/2020/1/29/21114377/tesla-coronavirus-delay-production-factory-china Production resumed 10 February, as did for suppliers and other companies around the country. Several precautions were taken to prevent virus spread, so preliminary plans indicate Tesla could add a second shift of production by the beginning of Q2 2020 which would increase line capacity to approximately 3,500 vehicles per week. By the end of the year, it reached 8,000 vehicles per week, and some of them were found to be right hand drive for export purpose to Australia and New Zealand. In November 2021, total production was 56,965 vehicles and capacity was estimated to be nearing 700,000 vehicles per year, becoming the largest of the Tesla factories. On 28 March 2022, Gigafactory Shanghai was again shut down, this time for 22 days due to a government lockdown in response to the 2022 Shanghai COVID-19 outbreak. It officially reopened on 19 April 2022, initially operating only one shift, with 8,000 workers sleeping at the factory, but resumed normal production near the end of May. On 12 January 2022, the China Association of Automobile Manufacturers (CAAM) announced that 310,000 new energy vehicles (NEVs) were exported from China in 2021, and that half of the total were assembled in Giga Shanghai. These produced cars are mainly sold to regions such as Europe and Asia and 10 more countries around the world. The main export destination for Chinese-made NEVs was Europe. The China Association of Automobile Manufactures Data showed that the most popular option is Tesla's Model 3.


See also

*
List of Tesla factories Tesla, Inc. operates plants worldwide for the manufacture of their products, including electric vehicles, lithium-ion batteries A lithium-ion or Li-ion battery is a type of rechargeable battery that uses the reversible intercalation of ...


References


External links


Tesla GigaFactory 3 Shanghai Updates
!-- Recorded the entire process of Gigafactory 3 construction through drones --> * * {{Pudong
Shanghai Shanghai, Shanghainese: , Standard Chinese pronunciation: is a direct-administered municipality and the most populous urban area in China. The city is located on the Chinese shoreline on the southern estuary of the Yangtze River, with the ...
Proposed buildings and structures in Shanghai Motor vehicle assembly plants in China 2019 establishments in Shanghai Shanghai, Giga