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Tesla Gigafactory 3 in China to exclusively produce Model 3 and Model Y variants
Tesla’s groundbreaking event for Gigafactory 3 showcased the company’s current lineup of vehicles and a personal appearance from CEO Elon Musk. As could be seen from images uploaded of the ceremony, Musk shared the stage with the first vehicle expected to be produced in the upcoming facility — a Tesla Model 3.
Unlike Tesla’s first Gigafactory in Nevada, which produces the Model 3’s drive units and battery packs, Gigafactory 3 is set to be equipped with production lines for both batteries and electric cars. As confirmed by Elon Musk earlier today prior to the facility’s groundbreaking ceremony, the Shanghai facility will be producing the Model 3 sedan and the Model Y SUV.
In a follow-up tweet, though, Musk also mentioned a particularly notable detail about Gigafactory 3’s output. In his update, Musk stated that the upcoming Shanghai facility would be exclusively producing “affordable” versions of the Model 3 and Model Y. Higher-end versions of the vehicles, such as the Model 3 Performance, would still be built in the United States and exported to international markets, including China.
Shanghai Giga will produce affordable versions of 3/Y for greater China. All Model S/X & higher cost versions of Model 3/Y will still be built in US for WW market, incl China.
— Elon Musk (@elonmusk) January 7, 2019
Such an announcement bodes well for Tesla’s strategy in the Asian economic superpower. Tesla’s vehicles in the country, after all, have so far been higher-priced than EVs produced by local electric car makers. By producing its lower-end Model 3 and Model Y in Gigafactory 3, Tesla would be able to price the vehicles very competitively in the country, mainly as the electric cars would not be subject to import taxes — regardless of the presence of a trade war between the United States and China.
Elon Musk has not provided more details about the “affordable” versions of the Model 3 and Model Y that would be produced in Gigafactory 3. In the case of the Model 3, though, Musk’s statement most likely pertains to the Standard Range version of the electric sedan. That’s a car that is, at its most basic iteration, priced in the United States in the same range as a top-tier Toyota Camry. The Tesla Model Y, on the other hand, is an electric car that would be competing in a market already enamored with SUVs. In China, a country that is aggressively pushing for the adoption of electric vehicles, such electric cars would likely be disruptive.
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- (Photo: TeslainShanghai/Imgur)
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- (Photo: TeslainShanghai/Imgur)
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- (Photo: TeslainShanghai/Imgur)
Images from Tesla’s Gigafactory 3 groundbreaking event in Shanghai, China. (Photo: TeslainShanghai/Imgur)
Tesla is aiming to follow an incredibly ambitious timetable for Gigafactory 3. When the company initially announced its target of starting vehicle production within two years after the facility begins construction, many in the United States were skeptical. Wall Street analyst James Albertine, for one, flat-out declared the target timeline was “not feasible.” In Tesla’s Q3 2018 production and deliveries report, Tesla did adjust its estimates, making its timetable even more aggressive. Earlier today, Musk noted on Twitter that the goal is to finish the initial construction of Gigafactory 3 this summer, followed by the start of Model 3 production by the end of 2019. Large-scale manufacturing of the electric sedan would begin sometime next year.
While such an aggressive timeline is classic Elon Musk, it should be noted that Tesla seems to be getting a considerable amount of support from the Chinese government. After the project was officially announced last year, for example, it did not take long before local Shanghai banks granted Tesla low-interest loans to fund part of the facility’s construction. Furthermore, Tesla’s bid for the 864,885-square meter plot of land in Shanghai’s Lingang Industrial Zone went unchallenged. The company’s construction partner, China Construction Third Engineering Bureau Co., Ltd, is also a subsidiary of China Construction, which is owned by the government.
With support from the local Chinese government, there is almost no doubt that Gigafactory 3 will be completed on schedule. Ultimately, the start of Model 3 production in the upcoming facility would likely depend on Tesla’s capability to ship and set up its equipment in the battery and electric car factory.
Watch Elon Musk’s speech at the Gigafactory 3 groundbreaking ceremony in the video below.
Although the two vehicles are built for completely different use cases, Tesla utilized engineering expertise while developing both the Cybercab and Semi to build a thermal architecture that would fit both vehicles. Of course, with some slight revisions.
The development was noted by Lars Moravy and Dan Priestley last week at Tesla’s Semi Handover event in Sparks, Nevada, where the company showed off its dedicated production facility for the Class 8 truck.
🚨 Tesla designed the integrated thermal systems for Cybercab and Semi at the same time as the vehicles were both in development
Tesla wanted to build one thermal system that worked with both vehicles, apart from small modifications.
Semi and Cybercab share parts 🤯 pic.twitter.com/KmzSsUbrcg
— TESLARATI (@Teslarati) September 25, 2026
Tesla’s decision to develop one thermal architecture for both the Cybercab and Semi is one of the more revealing engineering choices in the company’s 2026 lineup:
“We designed it at the same time we designed the Cybercab and we said okay we’re going to take our most efficient vehicle and our biggest vehicle and we’re going to take one thermal system and make it work for both.”
Core parts, meaning the compressor, pumps, and heat exchangers, are shared, with only modest changes to cooling-loop sizing and a larger radiator on the truck. The result, they said, is a compressor and thermal stack already proven across millions of miles, delivering “reliability from day one.”
Priestley also highlighted a practical payoff of the indirect design:
“There’s no AC lines, there’s no refrigerant lines…It comes from the factory fully charged, sealed with refrigerant, and it just exchanges coolant. It doesn’t actually run refrigerant up to the front of the vehicle.”
This eliminates potentially leak-prone plumbing that would otherwise require hands-on service, reducing overall uptime and potentially cutting into business margins. The megamanifold runs cabin HVAC and every powertrain heating and cooling loop at once, recapturing waste heat from motors and the battery instead of dumping it the way a diesel engine does.
The approach is just the latest chapter in a continuing story of stretching thermal solutions across wildly different vehicles. Model Y’s Octovalve evolved into the Super Manifold used on Cybertruck, and later Model S/X refreshes. Cybercab then introduced Supermanifold V3, which Tesla says is 80 percent automated to build and 38 percent more efficient than typical automotive thermal systems.
This thermal system is also shared with Cybercab – one thermal system for both our most efficient vehicle & our biggest vehicle
— Tesla Semi (@tesla_semi) September 25, 2026
Tesla has done the same with the 4680 cells, both being utilized in the Cybertruck and Semi, and with heat-pump compressors that Priestley noted were already common across the passenger-car fleet.
Concurrent development of crucial vehicle elements buys scale and reliability that a truck-only thermal system could not match. High-volume passenger car parts are cheaper and more accessible, which can give fleets a sealed, low-maintenance loop of operation from their first day of operation.
For owners and operators, that translates into less energy spent on cabin heat in the colder months, fewer refrigerant-related repairs, and a thermal architecture already stress-tested at passenger-car volumes before the first high-volume Semi left the lines in Nevada.
Tesla CEO Elon Musk certainly tipped off some details of the Tesla Roadster event with a broadening of information regarding the company’s decision to delay the unveiling for two weeks.
For years, people have speculated about what the Roadster will be capable of. While there have been plenty of things said about what it *could* do, we have not seen or been told by Tesla what it will actually be capable of.
However, over the past few days, Tesla’s weather updates have truly pushed the speculation into Plaid Mode, basically all but confirming the car will have some sort of aerial capability — whether that would be hovering or fully flying remains to be seen — but it definitely seems that it will be able to leave the ground intentionally.
“Because this event can only be held outdoors…”
Tesla posted on Monday that it would delay the Roadster event until October 15, and it indicated that it had to do this because the event “can only be held outdoors.”
With the potential SpaceX collaboration to develop cold-gas thrusters that will help the vehicle go airborne, doing this indoors is probably not a safe, or even plausible, possibility.
Roadster event update
We’ve been tracking the weather closely with local meteorologists, but given the severe conditions predicted & because this event can only be held outdoors, we’ve made the difficult decision to reschedule.
New date is October 15. Additional details to…
— Tesla (@Tesla) September 28, 2026
FAA Airspace Restriction
The FAA gave Tesla a Temporary Flight Restriction (TFR) for 10,000 feet above ground level, much higher than the typical 2,000-foot restrictions that are usually placed at SpaceX’s McGregor, Texas site.
Tesla Roadster event requires restricted airspace, and the FAA obliges
Some have said that this massive increase is due to Tesla’s need to restrict unauthorized drone use for spying on the event.
Elon Admits High Winds
“Due to high winds, the new Roadster demo is postponed by 2 weeks,” Musk said in a post on X yesterday.
Due to high winds, the new Roadster demo is postponed by 2 weeks https://t.co/dV3ojDh1iT
— Elon Musk (@elonmusk) September 30, 2026
A reply reading, “What’s strong wind got to do with a car demo with four grounded wheels?” was directly below Musk’s post, satirically and sarcastically probing for more details.
All signs are pointing toward an aerial demonstration for the Roadster.
Tesla has secured $30 billion in fresh credit lines from Citibank and Wells Fargo in an effort to scale its biggest current projects.
Tesla agreed to a $20 billion three-year delayed-draw term loan facility from Citibank, it announced on Tuesday. Additionally, it signed a five-year, $8 billion revolving credit facility and a $2 billion, 364-day term credit facility with Wells Fargo.
In a filing with the Securities and Exchange Commission (SEC), that it “may draw” from the $20 billion delayed-draw term “from time to time” and “no more than ten times during the 18 months following the closing date.” This loan matures on September 29, 2029.
The five-year revolving facility from Wells Fargo will also be accessed by Tesla “from time to time,” and will become due and payable on September 29, 2031. Tesla can request two separate one-year extensions.
On the $2 billion, 364-day revolving loan, it becomes due and payable on September 28, 2027. Tesla can also increase its additional commitments to an additional $4 billion across the Revolving Facilities. This would increase the total facilities to $14 billion. Tesla said it does not plan to utilize any of these loans in 2026.
Tesla plans to utilize the money to help prop up its ambitions to scale its biggest products, each of which is either in early launch phases or still in development. Of course, we’re talking about Cybercab and Semi, which have launched, and Optimus, which is still under heavy development and working toward initial release.
All three Tesla products have one thing in common: they’ve all required Tesla to build new manufacturing lines for them.
For the Semi, Tesla built a brand new factory in Sparks, Nevada, adjacent to the Tesla Gigafactory. For Optimus, Tesla sunset Model S and X production at the Fremont Factory, which brought an end to the two flagship models, thus creating manufacturing space for the humanoid robot. Finally, Cybercab is being built at Gigafactory Texas and officially entered production earlier this year.
The cash will help Tesla bolster its finances for the continuing development of these products. Tesla said that it forecasts its CapEx to be over $25 billion, up from just over $8.5 billion last year. These loans surely help with that spending.
Tesla Cybercab and Semi have more in common than you might think
Elon Musk weather update tips Tesla Roadster speculation into Plaid Mode
