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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.
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Tesla headlights have caused a recall of over 20,000 of the company’s two most popular vehicles, the Model 3 and Model Y, due to the low-beam bulb exceeding the maximum allowed intensity according to federal standards.
Tesla initiated the recall with the National Highway Traffic Safety Administration (NHTSA) this morning, stating that the low-beam output “exceeds the maximum allowed intensity in the outer upper-right and outer upper-left areas of the 10U and 90U zone, as prescribed in FMVSS No. 108.”
Tesla sourced the impacted headlights from Marelli Automotive Lighting, a Mexico-based company. The recall impacts 2020-2023 Model Y vehicles and 2017-2023 Model 3 vehicles. It is estimated that every VIN in this recall is impacted by the defect.
🚨 Tesla is recalling 20,349 2020-23 Model Y vehicles and 2017-23 Model 3 vehicles due to an excessively bright headlamp low beam.
Currently, there is no remedy plan in place, as it is still being developed. pic.twitter.com/y34cIO2U0B
— TESLARATI (@Teslarati) August 11, 2026
Typically, Tesla would remedy recalls of this nature through an Over-the-Air software update, which has been a major focus of criticism by the company and its supporters because the NHTSA still refers to it as a “recall,” even though it requires no action by the vehicle owner. The fix is shipped over the internet and downloaded to the car.
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However, there appears to be a potentially different solution for this problem. Tesla has not developed a remedy for this issue, so it could potentially be on the way. The big issue appears to be the fact that these recalled lamps are out of production, and this is an old body style for both vehicles. The headlights and front-end designs are completely different.
Tesla switched to another supplier when the affected headlight design was discontinued. It plans to begin notifying owners of their remedy options by September 15.
Tesla filed a petition protesting the recall to fix the vehicles’ headlight issue, but the NHTSA denied it. Now, Tesla will come up with a solution to fix it.
Elon Musk
Another Tesla SpaceX merger prediction by ARK Invest has Elon Musk talking
Elon Musk again denies a Tesla China split as new SpaceX merger speculation resurfaces quickly.
Elon Musk restated that Tesla has no plans to separate its China business from the rest of the company, responding to a new round of merger speculation from ARK Invest.
On the firm’s “Brainstorm” podcast, Cathie Wood’s team, including chief futurist Brett Winton and research director Nick Grous, argued a Tesla and SpaceX combination remains likely, with an announcement possible before the end of the year even if the deal itself would not close that quickly. Winton called Tesla’s Shanghai operations a “small ish wrinkle” for a merger rather than a real obstacle, since SpaceX’s national security work with the U.S. government sits uneasily next to Tesla’s manufacturing base in China.
Musk pushed back on the framing directly. “China is awesome. I strongly encourage people to visit,” he wrote on X. He also repeated language he first used in late July, when the Wall Street Journal reported that Tesla executives had been told to prepare for a possible spinoff, sale, or closure of the China business ahead of a SpaceX tie up. Musk called that report “absurdly fake news” at the time, adding that a separation had “never even come up in a discussion ever,” a line he echoed again this week.
The repeated denial has not settled the underlying question, because Shanghai’s role in Tesla’s business is exactly what makes a merger complicated. Gigafactory Shanghai still ships more than half of Tesla’s global deliveries and functions as the company’s main export hub for Europe and Asia. Teslarati previously reported on Musk’s initial denial, and the merger conversation itself has been building since SpaceX’s IPO gave it public shares to use as acquisition currency.
Wedbush’s Dan Ives has pegged the odds of a Tesla SpaceX merger at 80 to 90 percent by early 2027, and ARK’s prediction of a year end announcement adds another data point to that timeline, even as Musk keeps rejecting the specific mechanics reporters have described. Neither position rules out the other. Musk can deny a China spinoff was ever discussed while analysts still expect some form of combination to move forward, since ARK and Ives are both describing convergence at the corporate level, not necessarily the internal restructuring the Journal described in July.
For now, Tesla’s China business remains intact, and Musk’s comments this week make clear he has no interest in publicly walking that position back, no matter how often the merger question resurfaces.
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Elon Musk
The real reason Elon Musk wants every car connected to space
Elon Musk says all cars will eventually need Starlink to handle massive AI bandwidth demand.
Elon Musk is making the case that satellite internet, not fiber or cellular towers, will end up wired into every car on the road. In a string of posts on X, the SpaceX CEO wrote that all cars will have Starlink in the future and called satellite connectivity the only way to get super high bandwidth to billions of vehicles.
The posts started with Musk endorsing a Cloudflare forecast that traffic generated by autonomous AI agents will soon dwarf traffic generated by humans browsing the internet, a shift he described as not a close call at all. From there he narrowed the argument to infrastructure, writing that the only system that can support the insanely fast bandwidth growth needed by AI is Starlink, before extending the logic to cars specifically.
AI agentic Internet traffic will obviously VASTLY exceed human usage. Not a close call at all.
Cloudflare’s forecast is accurate. https://t.co/VztgrinN5k pic.twitter.com/Wo4FiRKjPU
— Elon Musk (@elonmusk) August 9, 2026
The timing lines up with Tesla’s own hardware decisions. On July 20, Tesla confirmed the Cybercab would ship with a Starlink V5 terminal built into its roof, the first time the company had put satellite hardware in a production vehicle. A day later, Tesla’s head of AI, Ashok Elluswamy, explained the connection wasn’t there for safety and that Cybercab’s driving stack runs entirely on onboard cameras and compute, while the satellite link exists for navigation, customer service, and fleet management instead. Musk followed with his own post about the feature, saying riders would be able to watch 4K streaming video during rides.
By July 22, Musk had already said Starlink would extend beyond Cybercab to Tesla’s full lineup. Sunday’s posts push that same logic outward again, this time framed as a requirement across the industry rather than a feature specific to Tesla, and tied directly to the bandwidth AI systems are expected to consume.
SpaceX’s newest Starmind will make earth data centers obsolete
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The AI argument has been building on SpaceX’s side for months. The company has an FCC filing pending for a third generation Starlink constellation, and it has separately proposed Starmind, a constellation of up to a million satellites designed to run AI computation directly in orbit rather than just relay data. Musk has said he expects space to become the cheapest place to deploy AI compute within two to three years. Starlink and Starmind serve different jobs inside that vision, one moving data and the other processing it, but Sunday’s posts treat vehicles as one more category of hardware that will eventually need both.
None of this changes anything for Tesla owners today. Cars already on the road keep running on LTE and Wi-Fi, and Tesla hasn’t outlined a retrofit path for existing vehicles. The July 22 commitment applies to future production, not the fleet already delivered. What Musk added on Sunday is the reasoning: satellite connectivity isn’t a Cybercab novelty, it’s a bet that ground based networks won’t keep up with how much data cars, robots, and AI systems are about to generate.
Tesla headlights cause recall of over 20,000 Model 3 and Model Y
Another Tesla SpaceX merger prediction by ARK Invest has Elon Musk talking
