Tesla Inc TSLA CEO Elon Musk said on Tuesday that the electric vehicle maker would expand its Giga Shanghai factory but has no plans to launch any new plants in China.
What Happened: The billionaire entrepreneur, speaking remotely at the Financial Times “Future of the Car” conference, said Tesla was focusing on ramping up production at its newly opened Giga Berlin and Giga Texas factories.
“China is obviously a very significant market. It is probably 25% to 30% of our market long term,” Musk said.
“We are not expecting to open any additional plants in China in the near future. We will be expanding our Shanghai factory. We are focused on Berlin and Texas and getting those to high-value production.”
Shanghai’s Importance: Giga Shanghai has come a long way since it first opened in 2019. The $2-billion plant with an annual capacity of over 450,000 units doubled up as an export hub until other factories came online. Last year, it produced more than half of Tesla’s global deliveries.
Giga Berlin and Giga Texas are expected to add a total of 1 million unit capacity when fully ramped up.
Proximity With China: Musk has had multiple run-ins with the Beijing government in the past but has always been quick to praise China.
“I was asked many times by the government of China to do a factory. We were not going to open one that was 51% locally owned and so if they were willing to change rules not just for us but everyone, then we would move forward…and they did,” Musk said.
Musk said he expects some strong EV competitors to emerge out of China.
“..there are a lot of super talented, hard-working people in China that strongly believe in manufacturing. They don’t just burn the midnight oil, they burn the 3 am oil. They don’t even leave the factory … whereas, in America, people try to avoid going to work at all.”
Price Action: Tesla shares closed 1.6% higher at $800 on Tuesday.
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