Electric car maker Tesla will build a new production facility in Shanghai, capable of manufacturing 500,000 cars per year. The gigantic factory is to become the city’s largest foreign-invested manufacturing project.
On the Pudong New Area site, already home to international brands such as MG Rover, Tesla will also build a new R&D centre. Tesla’s first Gigafactory outside the United States will reduce the need to import US-produced cars for the Chinese market. Tesla currently imports all the cars it sells in China from the US. The company ships more than 15,000 cars a year to China. According to a report by Shanghai Daily, setting up the (wholly-owned) Shanghai factory in China will cut Tesla’s shipping and tariff costs while also meeting the demand of the world’s largest auto market.
According to the report, China increased the import duty on US-made cars to 40 percent last week, forcing Tesla to raise the prices of its Model X and S cars by about 20 percent. Tesla’s Model S sedan now costs about 849,900 yuan, compared with 710,579 yuan in May. The price of its Model X sport-utility vehicle rose to about 927,200 yuan from 775,579 yuan.
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