Musk Aims to Produce 500,000 Cars Annually in China in 2020

Hooray! Tesla broke ground on a factory in China. Elon Musk's goal is a lofty one.

The Wall Street Journal reports Elon Musk’s China Factory—Now a Field, Soon a Plant—Aims to Pump Out Its First Tesla This Year.

With the ceremonial groundbreaking at the plant east of downtown Shanghai on Monday, Tesla now faces a race to start local production to take advantage of robust demand for electric vehicles in the world’s biggest auto market.

Chief Executive Elon Musk was on hand at the 210-acre site to press a button to “switch on” the plant, which at the moment is a field. Mr. Musk said he aims to build the plant “in record time.” Initial production of the Model 3 could start by the end of the year, he said, with the factory “achieving volume production next year.”

“It makes sense for Tesla to commit fully to becoming a leading EV brand in the world’s largest EV market,” said Bill Russo, chief executive of Shanghai-based consulting firm Automobility.

Tesla was the first foreign auto maker to take advantage of a recent rule change allowing foreigners to own their China business, instead of having to work with Chinese partners as previously required. That is a gamble, Mr. Russo said. “It will take billions of dollars to build a new footprint in China,” he said. “As 100% owner, this burden falls on Tesla.”

China is central to Telsa’s aim of graduating from niche startup to mainstream global auto maker. Tesla’s existing plant in Fremont, Calif., is ramping up to produce 500,000 annual capacity. The Shanghai plant is designed to make another 500,000 cars annually—a massive step up for a company that sold fewer than 14,000 cars in China in the first nine months of 2018, according to LMC Automotive, which tracks the auto market. The plant will build the Model 3, and the yet-to-be-launched Model Y small crossover.

Having control isn’t likely to free Tesla from China’s onerous bureaucracy nor safeguard its intellectual property, Mr. Russo warned. “Chinese authorities will likely try to influence everything from how Tesla stores customer data to its local supplier selections,” he said.

Good luck with that.

Musk does not do anything in record time. Nor does Musk produce a quality product. This will be interesting.

Mike "Mish" Shedlock

Comments (24)
No. 1-10

By the time that plant opens, China will have 3 copycat companies pushing cars out at half the price


Musk himself doesn't really produce much of anything. Neither is he supposed to. What he has done, at least so far, is sucker/convince enough people to hand those who are producing Teslas enough money to keep the show going for far longer than many had predicted.

If he can be as convincing to Chinese movers and shakers as he has been to American/Western ones, Tesla may do well in China as well. China does have the advantage of being, if possible, even more centrally planned than the West. And has even more riding on promoting BEVs, seeing as they have less in the way of an internationally competitive ICE sector vying for attention. Both of which should play to Mr. Musk's proven strength: Selling dreams to those in the position to pay for them with other people's money.


The cars are cool- insanely fast- but too expensive and repairing them can take months! Musk is a liability ...blowing cash all over on stupid projects and priorties. If Tesla can get an electric car of decent quality down to 28k he will do fine


I suspect that plant will never open. From the looks of the picture its a swamp.