Tesla rolls out a million EVs in 13 months, hails Shanghai production pace

Tesla reached another milestone in China on Wednesday after its Gigafactory 3 in Shanghai rolled out its two-millionth vehicle, an achievement that the US carmaker views as a triumph for itself and its Chinese suppliers.

Tesla said on the Chinese microblogging site Weibo that more than 95 per cent of the components supplied to the plant, its largest facility worldwide, are made in China. The two millionth made-in-Shanghai Tesla EV, a Model Y sport-utility vehicle, reflects the fast pace Tesla and its Shanghai partners have achieved since it began building the US$2 billion plant in January 2019, the company said.

“The fast pace achieved by Tesla and Shanghai will sustain its momentum as we continue to build better electric cars for people,” the carmaker said.

The carmaker completed the assembly of its first million vehicles in Shanghai in August last year, 33 months after Gigafactory 3 became operational in December 2019.

The factory, which completed an upgrade in August last year that increased its capacity by 30 per cent to one million units a year, has now reached the production of another million vehicles in less than 13 months.

“Based on the capacity [of the Shanghai factory], the output of one million vehicles in 13 months means Tesla has been fully utilising the facility to build its cars,” said Gao Shen, an independent analyst in Shanghai.

“Tesla’s made-in-Shanghai vehicles remain well received by mainland Chinese and foreign customers.”

The factory, located in the city’s Lingang free-trade zone and also known as Giga Shanghai, churned out 710,000 vehicles last year, more than half of the company’s total output of 1.31 million units.

Wednesday’s milestone came after Tesla said on Friday that it had begun taking orders for an upgraded Model 3 that has a longer driving range and costs 12 per cent more. The new model is priced at 259,900 yuan (US$35,586), compared with 231,900 yuan for the previous entry-level edition.

The revamped version can go as far as 606km on a single charge, 9 per cent longer than the older version’s 556km. Its suspension has also been upgraded and rear passengers now get a screen. Deliveries of the refreshed Model 3 will start in the fourth quarter of this year.

Tesla is currently the runaway leader in the mainland’s premium EV segment, but faces the uphill task of keeping its Chinese competitors at bay, because new models developed by Chinese EV makers have more intelligent features than the Model 3 and Model Y, in terms of autonomous driving technology, in-car entertainment systems and battery performance.

Tesla launches revamped Model 3 with longer driving range, bigger sticker price

In July, Giga-factory 3 handed over 31,423 vehicles to Chinese customers, down by 58 per cent from a month earlier, according to the China Passenger Car Association. Li Auto, a Chinese competitor, delivered 34,134 vehicles – 8.6 per cent more than Tesla – the same month before it hit an all-time high of 34,914 deliveries in August. Tesla’s August delivery numbers are not yet available.

Moreover, in a teardown report on Tuesday Swiss lender UBS said that Chinese EV giant BYD’s pure electric Seal sedan has a production advantage over Tesla’s Model 3 assembled in China. The cost of building a Seal, a potential rival to the Model 3, is 15 per cent lower, the Swiss bank said.