Tesla Gigafactory 3 Construction in Shanghai is 'Ludicrously Fast'

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【Summary】Tesla's Gigafactory 3 in Shanghai has entered into its first construction phase and the factory is starting to take shape very quickly.

Manish Kharinta Mar 24, 2019 10:31 AM PT

Tesla Gigafactory 3 Construction in Shanghai is 'Ludicrously Fast'

Tesla CEO Elon Musk speaks at the groundbreaking ceremony for the electric automaker's new factory in Shanghai on Jan 6, 2019.

Just a week after the world premier of the Tesla Model Y, reports are flooding in about Tesla's Gigafactory 3 construction progress in Shanghai.

As of this month, the Shanghai Gigafactory has entered into its first phase and the factory's ground infrastructure is starting to take shape.

Tesla CEO Elon Musk secured $521 million in loans for the new Gigafactory from Chinese banks. Tesla sourced these funds from China Construction Bank Corp., Agricultural Bank of China Ltd., Shanghai Pudong Development Bank Co., and Industrial and Commercial Bank of China Ltd. The substantial investment seems to have accelerated the construction progress significantly throughout the site.

The Tesla Gigafactory construction site in Shanghai, China.

The fast-tracked construction of Gigafactory 3 is also a strategic financial move for the automaker, as the loan secured by Tesla will mature in March 2020. Tesla also entered an asset-backed credit agreement in which the company can borrow up to $700 million.

The overall investment for the Gigafactory 3 in Shanghai is estimated to be around $2 billion. The Gigafactory 3 is going to be a dedicated facility, which will produce affordable versions of the mass-market Model 3 and the recently launched Model Y crossover for the greater China region.

Tesla will continue to manufacture the more expensive version of Model 3 and Model Y out of its U.S. factory in Fremont, California.

An artist rendering of the completed Gigafactory 3

The facility's construction started in early January after a groundbreaking ceremony. Tesla expects it to be completed by the end of summer. The company plans to assemble around 500,000 battery packs per year using lithium-ion cells at the factory, which it will source from several suppliers including Panasonic.

Reports say that work on the site is in full swing, with teams of workers working 24 hours a day to meet the construction deadlines. The Gigafactory 3 uses steel beam structures, which aid in speeding up the construction by allowing workers to assemble the factory a building block like manner.

During the launch of Tesla Model Y, Musk said that a insufficient supply of batteries is a major challenge when producing a large volume of electric cars.

With millions of dollars invested in the new Gigafactory, Tesla will be able to reduce production costs and generate a reliable supply of battery packs in high volume.