Investor's Corner

Tesla Gigafactory 3 to be supported by Industrial Park in Shanghai, says official

Tesla is poised to start producing the Model 3 at Gigafactory 3 later this year. (Credit: Vincent Yu/Twitter)

A recent announcement from a Shanghai official has revealed that the Chinese government will be building a Tesla Parts Industrial Park to support Gigafactory 3’s operations.

The update from China was related by Zhao Guangjun, the deputy director of the Comprehensive Planning Department of the Shanghai Economic and Information Technology Commission. The industrial park will be constructed at the Fengxian District of Shanghai, which is just around 31 miles away from the Lingang Industrial Zone, where Gigafactory 3 is being built, according to local financial news agency JRJ.com.

Having an industrial park in relatively close proximity to Gigafactory 3 will make Tesla’s electric car production much more efficient. With its supply chain nearby, Tesla would be able to perform adjustments to its operations as necessary. This, if any, gives Tesla a level of flexibility that is not present in its operations in the United States. 

Zhao’s announcement stands as yet another indication of China’s full support for Tesla and its electric vehicle production operations in Gigafactory 3. The Chinese government has proven to be quite supportive of Tesla, allowing Gigafactory 3 to be solely-owned by the electric car maker and even helping the company acquire the initial funding for the facility. Even Tesla’s construction partner, China Construction Third Engineering Bureau Co., Ltd., is a subsidiary of the government-owned firm China Construction. 

The Asian economic superpower’s open support for Tesla could be rooted in the country’s aggressive plan to embrace sustainable transportation and renewable energy. China aims to sell 7 million electric or electrified vehicles annually by 2025, and the presence of locally-made Model 3 and Model Y from Gigafactory 3 could provide a boost to the local EV market. In a previous statement to Xinhua News, Cui Dongshu, secretary general of the China Passenger Car Association, noted that “Tesla’s China production will have a ‘catfish effect’ in the country’s auto industry, pushing domestic carmakers to speed up their technological upgrading.”

Tesla’s Gigafactory 3 buildout is on track to potentially set records among China’s fastest industrial-scale construction projects. After the facility completed its Phase 1 buildout in May, the factory underwent ground hardening in June. These will be followed by pipeline communication, equipment stationing, equipment commissioning, and finally, trial electric car production runs. Barring any unexpected delays, Tesla could start producing its first Gigafactory 3-made Model 3 batches as early as September.

Tesla Gigafactory 3 to be supported by Industrial Park in Shanghai, says official
To Top