During an address to the National Press Club in Canberra, Australia, on Wednesday, Tesla Chair Robyn Denholm explained why it is pertinent for the electric vehicle maker to expand its roots in countries such as China. The executive noted that Tesla’s goal of producing 20 million vehicles per year by 2030 requires the company to have manufacturing locations on every continent.
“We’re building factories around the world. Our view is the world is going to electric vehicles and to batteries that are lithium-ion based and we need to be in all of the major markets around the world,” Denholm said, adding that it’s pertinent for companies like Tesla to ensure that its supply chain is optimized.
“Producing vehicles on continents is important because, again, when you’re setting a supply chain for the long term, you want those miles those cars travel before someone actually owns them to be the shortest possible, and that includes shipping and sea freight because all of those processes add to CO2 emissions,” she added, according to a Bloomberg News report.
Tesla China is taking on an increasingly large role in the company’s operations, and in the Q2 2022 Update Letter, it was formally revealed that the facility has become the EV maker’s largest factory by output. Following upgrades to its Model 3 and Model Y production lines, Gigafactory Shanghai is now expected to hit a capacity of about 1 million vehicles per year.
When asked if she was worried about Tesla potentially being caught in the middle of a strategic competition between the United States and China, the executive was consistent in her response. “Markets around the world are really important and so having manufacturing capability on each of the continents is important,” Denholm said.
Tesla has so far enjoyed some notable perks in China, such as low-interest loans, tax breaks, and a rare permission to solely own a vehicle manufacturing facility in the country. And while Tesla has faced scrutiny at times in China, Giga Shanghai has also become a point of pride of sorts for the local auto sector, thanks in part to the facility’s capability to export domestically-produced premium electric vehicles to foreign territories such as Europe.
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