Business Essentials for Professionals


Tesla To Start Production In Its China Factory By This Month: Reports

Tesla To Start Production In Its China Factory By This Month: Reports
According to reports, the factory set up by the United States based electric car maker Tesla is slated to begin production as early as this month. However the reports, quoting unnamed sources with knowledge of the matter, also warned that it was not clear whether the company would be able to meet its production target for the tear because of uncertainties for orders for new cars in China and abroad.
The self imposed production target for the current year set by Tesla for the Chinese factory is at 1,000 Model 3s every week by the end of the current year. The Chinese production facility is at the centre of the company’s strategy to increase sales in the Chinese market – the largest market for electric cars in the world. Another of the aims of the company is to avoid the import tariffs on imported US cars imposed by Beijing as a part of the trade war with the Washington.
The strategy of Tesla to mass produce electric cars at its Chinese facility is crucial for the overall aim of the company to achieve a total production of 500,000 cars by the end of the current year.
According to the news reports, crucial government approvals from China were granted to Tesla’s Chinese factor – its only manufacturing facility outside of the US, worth $2 billion and hence is running on schedule to beign production later this month as planned.  
“We aim to start some production in October, but the actual production volume depends on many factors including car orders we received, performance of newly hired workers, supply chain and so on,” a sources from Tesla was quoted as saying in a Reuters report. “It’s unclear when we can reach the 1,000-2,000 units per week target,” the source, who was not named in the report,  told Reuters.
No official confirmation about the news reports was available from Tesla.
This Tesla factory is set to begin production even as the Chinese auto market reported its worst performance in years and the lingering of the acrimonious trade war between the US and China. According to data from a Chinese industry association,  there was a contraction in the sales of new energy vehicles in the month of august for a second straight month in the market and it is anticipated to grow slower for the rest of the year and record total sale of 1.5 million cars. In comparison the figure forecast earlier was 1.6 million vehicles.
But according to research firm LMC Automotive, in the first seven months of this year, Tesla reported a 98 per cent growth in sale of its cars in China primarily driven by the increase in demand for its Model 3.
According to its job advertisements, the US electric car maker is also seeking to hire production engineers for its car batteries in Shanghai. According to analysts, this Tesla factory is the first foreign owned car factory in China and is reflective of the current efforts of Beijing to open up its car market to foreign companies. 

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc