Tesla could be looking to open a second Gigafactory in China, according to local reports.
The electric automaker already has one production facility in China with Giga Shanghai, which is currently producing around 200,000 vehicles per year, according to Tesla.
However, Tesla will need more production facilities in Asia to keep up with the increasing demand that the company has experienced since starting deliveries of its Made-in-China vehicles in January 2020.
Tesla China executives, including Vice President Tao Lin, has reportedly met with government officials in the city of Chongquing. The city is located in Southwestern, China, and the meeting was put together to discuss the development of accelerating products.
Accelerating projects could mean a variety of things, however. According to the official China Securities Journal newspaper, Tesla could be building a series of new sales and maintenance centers rather than an actual new production facility, SeekingAlpha reported.
Currently, Tesla’s construction crews are working on building the second phase of the Giga Shanghai facility. The first phase is responsible for building the Model 3, while the second phase will build the Model Y crossover, which has yet to make its way to the Asian market.
China has contributed a considerable amount to Tesla’s emergence during the COVID-19 pandemic, which temporarily shut down Giga Shanghai for a week. The facility reopened on February 10, thanks to a series of health and safety precautions.
In China, Tesla’s presence has helped the Model 3 become one of the most popular vehicles in the country. In June, Tesla managed to take 23% of the country’s overall electric vehicle market share for the month. Additionally, Model 3 sales rose 35% compared to May.
Since the beginning of the year, TSLA stock has gained nearly $1,040 in value and has quickly surged to become the most valuable automaker in the world. Thanks to its surge in price per share, the company’s market cap has gone beyond Toyota, Volkswagen, and Honda’s valuation combined.
Tesla’s domination in the automobile manufacturing sector in 2020 has come down to developments in technology, battery improvements that have increased range and longevity, and the company’s reduction in vehicle prices.
Tesla is expected to hold a Battery Day along with its Shareholder’s Meeting on September 22, where it will reveal the advancements it has made in battery technology throughout the past year.
Additionally, Tesla’s Q2 2020 Earnings Call will take place on July 22. The company beat Wall Street’s 75,000-80,000 delivery estimates soundly, by successfully giving 90,650 vehicles to owners during the second quarter of the year.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.