Tesla China plant to open soon

Tesla’s China factory aims to start production this month but it is unclear when it will meet year-end production targets due to uncertainties around orders, labour and suppliers, sources with knowledge of the matter said.

The US electric vehicle maker aims to produce at least 1,000 Model 3s a week from the new factory by the end of this year, the centrepiece of its ambitions to boost sales in the world’s biggest auto market and avoid higher import tariffs imposed on US cars.

The plant’s mass production schedule is crucial for Tesla’s hopes of reaching its total production rate at an annualised 500,000 vehicles by the end of this year.

The $2 billion factory - Tesla’s first car manufacturing site overseas - gained key government approvals last month and is on schedule to start production in October, the sources said.

“We aim to start some production in October, but the actual production volume depends on many factors including car orders we received, performance of newly hired workers, supply chain and so on,” a Tesla source told Reuters.

“It’s unclear when we can reach the 1,000-2,000 units per week target,” the person said, declining to be named as he was not allowed to speak to media.

Tesla did not respond to requests for comment.

The factory is kicking into gear amid the US-China trade war and weakness in China’s auto market. Sales of new energy vehicles contracted for a second month in a row in August, and are likely to grow at a slower pace this year to 1.5 million vehicles, down from a previous forecast of 1.6 million, according to an industry association.

Tesla has fared better, with China sales rising 98% in the first seven months of this year thanks to strong demand for Model 3, according to research firm LMC Automotive.

Reuters