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Documents Submitted by Tesla in China Hint at a Production Increase at the Company's Shanghai Gigafactory

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【Summary】Tesla is planning to increase production capacity at the Gigafactory 3 to match the increasing demand for its China-made vehicles, according to a document submitted by the company in China.

Manish Kharinta    Mar 15, 2020 3:30 PM PT
Documents Submitted by Tesla in China Hint at a Production Increase at the Company's Shanghai Gigafactory

Considering how exciting things are looking for the American electric vehicle pioneer Tesla, it's reasonable to believe that the company might be looking to increase production capacity to match the growing demand for its electric vehicles.

Several reports corroborating these rumors have surfaced online and hint at Tesla's intent of increasing manufacturing capacity at its Gigafactory 3 facility in Shanghai. 

Tesla recently submitted a document to the Shanghai government intending to upscale the production of motor controllers, battery packs, electric motors, and other components. The document was seen by Reuters

More specifically, the document appealed for an increase in the production of cooling pipe sets, which are essential thermal management components used in Tesla's vehicles. 

According to Reuters, the document stated that Tesla intends on increasing production of the cooling pipe sets to 260,000, annually from the current 150,000 unit capacity, which matches Tesla's future production goals. 

Annual production at the Gigafactory 3 is expected to increase to between 250,000 and 260,000 vehicles, up from the current capacity of 150,000. 

We expect that the new production ramp up will include additional Model Y variants, along with the entry-level Standard Range Plus (RWD), Long Range, Performance, and AWD versions of the Model 3 sedan.

So far, the reports have not detailed how this increase in production will affect other components, or in what capacity. An additional stamping line is also said to be under development to increase the turnout at the Shanghai facility. 

Tesla's end game is to produce the Model 3 sedan locally in China, which is no walk in the park considering that as recently as Dec 2019, the company had to import around 70% of the components for the production of the China-built Model 3. 

China is the world's largest auto market and building cars locally helps Tesla avoid import tariffs, giving the company an advantage over its global rivals.

Production operations resumed at the Gigafactory 3 in Shanghai on Feb 10, 2020, after the mandated time-off period enforced at the end of China's New Year celebrations to fight the spread of the Coronavirus.

Tesla is Also Scouting Locations for a New Gigafactory in the U.S.

Tesla Chief Executive Elon Musk also took to Twitter last week to announce that the electric automaker is currently scouting locations for its next Gigafatory, which might be built somewhere in the central United States. 

The facility will focus on the production of two of Tesla's most anticipated electric utility vehicles—the Cybertruck and Model Y crossover. 

According to Musk, Model Y production at a new facility will help the company meet the growing demand for its electric SUV from consumers living on the east coast of the U.S.

For now, Model Y production is underway at Tesla's factory in Fremont, California with deliveries to reservation holders already underway. Eventually, Tesla's facilities in China and Germany will begin manufacturing the competitively priced electric crossover. 

Production of the Cybertruck, however, is scheduled to start sometime in 2021. 

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