Tesla delivers first China-made Model 3 sedans within a year

Tesla has started delivering Model 3 electric cars built at its Shanghai factory in just under a year since it began work on the $2 billion plant, a record for global automakers in China, and said it would ramp up deliveries from next month.

The US electric vehicle maker marked the start with an event on Monday where 15 Tesla employees received cars they had purchased, one of whom took the opportunity to propose marriage to his girlfriend after getting his new set of wheels.

The China-made Model 3 sedans are priced at 355,800 yuan ($50,000) before subsidies. Imported Model 3 vehicles start at 439,000 yuan for the longer-range version, while the standard range plus model costs under $40,000 in the United States. The Shanghai plant, up and running in just 357 days, is part of Tesla’s plans to bolster its presence in the world’s biggest car market and minimise the impact of the US-China trade war.

The automaker, which previously imported all the cars it sold in China, had said it wanted to start deliveries from the Shanghai plant before the Lunar New Year beginning on Jan.25.

“From now onwards China-made Model 3 vehicles will start running on China’s large streets and small lanes,” Tesla Vice President Tao Lin said at the delivery ceremony which was attended by employees and Shanghai government officials.

China General Manager for the Silicon Valley carmaker Wang Hao said Tesla plans to ramp up Model 3 deliveries in January.

The Chinese government has been supportive of the factory, the first wholly foreign-owned car plant and a reflection of Beijing’s broader shift to open up its auto market.

Tesla has taken a different approach to the Chinese market, the world’s biggest for electric vehicles with 1.3 million new-energy vehicles sold last year, as is evident from its marketing blitz in the country that is quite unlike anywhere else.

The company and its flamboyant billionaire CEO Elon Musk openly disdain marketing, but in China Tesla has offered racing events and showroom parties. It is also building service centres and charging stations across China to assure customers of standardised after-sales service, Tesla’s senior executives said, confirming a Reuters report on the plans published last month.

The car maker will double the number of service centres and fast charging stations in China next year, and plans to more than double its after-sales workforce to 1,500 from about 600 currently, the executives added.

Wang also told reporters the plant had achieved a production target of 1,000 units a week, or around 280 cars a day, and that sales for the China-made sedan had so far been “very good”.

Meanwhile Tesla’s shares traded above $420, more than a year after Elon Musk tweeted he had “funding secured” to take the electric car maker private at that price, only to later give up under investor pressure and regulatory concerns on Dec.25.

In recent months, Tesla’s shares have had a run of good fortune on the back of a rare quarterly profit reported in October, news of production ramp-up in its China factory and upbeat early deposits for its recently launched electric pickup truck.

Orders for the company’s Cybertruck have reached close to the record set by its Model 3 sedans in 2016.

“The stock is so high,” Musk tweeted on Monday, after Tesla shares crossed the $420 mark. The number 420 is closely associated with marijuana as a slang for the consumption of cannabis. It also refers to cannabis-related celebrations that take place annually on April 20.

The take-private tweet in August last year, at a time when Tesla was trading in the mid-$330s, had taken shares as high as $387. Later in the month, shares were closer to $320 amid intense regulatory scrutiny.

The US Securities and Exchange commission fined Musk and Tesla $20 million each for the $420 tweet.

Musk was also forced to step down as chairman and must submit any public statements about Tesla’s finances and other topics to be vetted by a legal counsel.

Reuters reported earlier that the company and a group of Chinese banks have agreed to a new 10 billion yuan ($1.4 billion), five-year loan facility for the automaker’s Shanghai car plant.

Reuters