Tesla Shanghai Gigafactory Phase 1 Completed, New Lower-Priced Model May be Coming

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In response to those reports, the Beijing News on Wednesday quoted a Tesla Inc (NASDAQ:TSLA) source as saying, “The Shanghai plant is progressing as planned, there’s just nothing to announce to the public at this stage.”

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The First Phase Of Tesla's Shanghai Gigafactory Completed

The first phase of Tesla's Shanghai Gigafactory project has been fully built, Beijing News said Wednesday, citing an environmental assessment and adding that it could mean the company's new lower-priced models will begin mass production.

The second part of the project was completed on June 27, and commissioning began on July 5, meaning the first phase of Tesla's Shanghai Gigafactory is officially complete, the report said.

In January, Tesla China began construction of the second part of the first phase of the Shanghai Gigafactory, which is further divided into two parts, A and B. Construction of part A began on Feb. 1 and was completed on March 9.

With the commissioning of part B officially started on July 5, the second part of Shanghai Gigafactory Phase I is completed, which means that the construction of Shanghai Gigafactory Phase I has been fully completed, the report said.

In the earlier environmental assessment report, Tesla mentioned that the second part of the project will add production processes such as stamping, painting, welding and final assembly of pure electric vehicles, and after the project is completed, it will add production capacity for Model 3, Model Y models and related derivative models.

Tesla had said that the project is an expansion project, and the purpose is to enhance the production capacity, while the production process is basically unchanged, only a small amount of adjustment for the new models.

Tesla China currently has four projects in Shanghai, namely the Tesla Gigafactory plant project, the first part of the first phase of the Gigafactory, the first part of the parts production process upgrade project, and the new model advance launch project, and it currently has only the parts production process upgrade project remaining to be completed, the report noted.

Mass Production of New Models To Begin

With Tesla's Shanghai Gigafactory Phase I construction completed, it may mean that mass production of new models with lower selling prices will begin, the report said.

Previous media reports have suggested that Tesla plans to launch new models in China priced at about $25,000 (about 160,000 yuan), positioning them below the current cheapest Model 3, though this has not been confirmed by Tesla China.

With the construction of the first phase of the project completed, whether the second phase continues to be a focus of attention.

Reuters previously reported that Tesla had put on hold plans to buy land to expand its Shanghai plant and make it a global export hub.

The report mentioned that Tesla had previously considered expanding exports of its entry-level Model 3 made in China, but now Tesla intends to limit Chinese production as a percentage of its global production.

Chinese media cited people close to Tesla's Shanghai Gigafactory as saying that the second phase of the plant's expansion is currently on hold.

This article was first published by Phate Zhang on CnEVPost, a website focusing on new energy vehicle news from China.

Article by Phate Zhang, EqualOcean