Tesla has reportedly stopped purchasing additional land to expand its giga facility in Shanghai, China. The rising tensions between China and – among others – the US would be reason to reconsider the plans.
Tesla planned to turn the gigafactory in China into a huge global ‘hub’, unspecified sources report to Reuters. For the time being, however, according to the same sources, expansion is being halted, because the relationship between China and the rest of the world has not improved recently.
That is why Tesla would have decided in March not to purchase a piece of land next to its gigafactory in Shanghai. The plans to boost production in that factory in a big way and thus serve a larger part of the world from this place, would have been put on hold for a while.
Incidentally, the word ‘purchase’ in connection with this land is debatable, because land in China is by definition of the state. What is actually purchased is only the right to use that land for a certain period of time.
Import duties
The most concrete danger to Tesla’s plans is rising import tariffs. These are already not tender in the US thanks to previous levies by former President Donald Trump, which makes it difficult to export cars made in China to Tesla’s homeland. Still, that’s what Tesla was reportedly planning, even though those kinds of plans have never been made public before. In Europe, the time has already come: certain versions of the Tesla Model 3 are already being produced in China for the European market.
Tesla’s gigafactory in Shanghai is said to be good for 500,000 cars a year, but currently makes 450,000 cars a year. What is special is that Tesla is the only non-Chinese car manufacturer that is not obliged to form a joint venture with a Chinese car manufacturer.