Made-in-China Tesla 3s to be Sold in Europe and Asia

A story running in Reuters that quotes two insider sources reports that the intention is for Tesla to use their new factory in China to produce cars for the rest of Asia and even for the European markets. The US-based manufacturer headed up by our old friend, Elon Musk, started delivering Model 3s in China last December. So far, all of the production has been destined for the China market, but exporting them seems to be firmly on the agenda in the future.

Although there has been no response from Tesla back in Americaland, it is a matter of public record that the company is already trying to expand capacity so they can manufacture the Model Y Sports Utility Vehicle at the Shanghai facility as well. Tesla is currently targeting a production run of about 150,000 vehicles this year within the PRC, which will represent a leap from the 18,000 they sold in 2019.

Of course, when Tesla opened its Giga Factory in Shanghai, they were adamant that the factory would be about gaining cost and competitive advantages within the territory so that they could compete in the local market. In fact, during the planning stages of the factory, the Company went as far as to say that the Shanghai factory would only build budget cars and the higher-end Model 3 and Model Y would still be built in the US of A.

These plans allegedly all got changed when the Coronavirus pandemic (another one of China’s exports) closed Tesla’s Fremont factory and so Shanghai picked up the slack. However, changing a car production line is not that easy and so I for one believe that it was always the intention to produce the Model 3 in China for export. Or, this may in fact signal that the demand for the Model 3 in China is not what the company would have you believe and now they need to shift the excess production to other countries. Got a feeling we will be hearing more about this in the near future.