Tesla Planning Shanghai Factory With Capacity For 500,000 Vehicles A Year

Update: According to Bloomberg, Tesla, and the Shanghai government have signed a MOU on a plant with 500,000/yr capacity:

Tesla to build an electric car plant in Shanghai with capacity of 500k vehicles/year, according to statement from Shanghai government.

Perhaps this time it's for real.

A Tesla spokesperson said Tuesday morning that Tesla will have the China plant up and running in two years, which, like most of Musk's projections, should be taken with a grain a salt. Tesla's lone car-assembly plant in Fremont has struggled to produce 88,000 cars through the first half of this year. Last year, Tesla managed to sell a meager 14,779 vehicles in China. Now, they're hoping to produce 500,000 cars a year (though no doubt some of those will be exported to other regional hubs).

But hey - it's a "growth market", right?

* * *

With reports of rising breakdowns and poor quality issues threatening to blunt investor enthusiasm for Tesla's stock after CEO Elon Musk managed to meet his latest "factory-gated" Model 3 production deadline (at least on paper), Tesla shares have resumed their ascent this morning after a report sourced to "people familiar with the matter", according to which Tesla is planning to build a factory in Shanghai with a capacity for 500,000 vehicles a year.

According to Bloomberg, Tesla is expected to sign a memorandum of understanding with local authorities regarding building the factory. While investors responded enthusiastically to the news, the fact remains that the Wall Street Journal published a nearly identical story roughly a year ago while Engadget covered Musk's China ambitions all the way back in 2015, a tradition as Musk has waved the China strawman flag any time he needs a Hail Mary to push the stock price higher (like now). Back then, Tesla and Chinese officials denied that there were any concrete plans for a Tesla factory in Shanghai, but Tesla later revealed that it was working with local officials to explore "opportunities in manufacturing."

Musk was expected to be in Shanghai for an event with government officials on Tuesday.

Tesla


Much has changed since WSJ published its false-alarm report last year: China has taken steps to liberalize its auto industry by making it easier for foreign companies like Tesla to establish a foothold in the Chinese market. And China's retaliatory tariffs on US automobiles and auto parts recently forced Tesla to hike the prices of its Tesla Model S and Model X sedans by roughly 20%, ratcheting up the incentive to manufacture locally.

Also, unlike last time, the local government's "encouragement" of foreign investment in advanced manufacturing in the region may actually mean Tesla pulls it off this time. By luring Tesla on to the mainland, China is hoping to steal some of the manufacturing jobs that President Trump covets, away from the US. Meanwhile, in exchange for allowing Musk to build cars on the ground, bypassing tariffs, Beijing will promptly seek to "expropriate" Tesla's technology.

Tesla shares climbed 2.7% in the pre-market on the news, rising to $327 in recent trade, if still well below last week's transitory highs.

Tesla

Comments

Yellow_Snow MasterPo Tue, 07/10/2018 - 08:15 Permalink

"Tesla Planning Shanghai Factory With Capacity For 500,000 Vehicles A Year"

Bullish News for Tesla stock price...  up about 9.5 dollars

Expect POTUS 'tweets' in  3,  2,  1

Tariffs - Wininnnnnnnnnnnng  !!!

In reply to by MasterPo

jcaz Yellow_Snow Tue, 07/10/2018 - 08:35 Permalink

When Elon doesn't pay back US taxpayers, we all sigh and say "Oh Elon....."

When Elon doesn't pay back Chinese taxpayers,  Elon winds up scattered at sea.......

Edit:  I just saw that the Chinese company that Tesla signed with only has about $2.2B in assets-   BUWHAHAHHAHAH!!!!!!!!  Elon is firmly in bed with the Hong Kong penny-stock market now....

In reply to by Yellow_Snow

Antifaschistische jcaz Tue, 07/10/2018 - 09:13 Permalink

Chinese taxpayers?

You have to understand how China works....and how Chinese people think.

If Tesla breaks ground on a mega plant in China, the Chinese people will fall ALL over themselves to "invest" in TSLA stock.  You ain't seen nothing yet.  Americans are at LEAST tempered by some degree of skepticism.   That skepticism will not exist with Chinese investors who will bid TSLA to the moon, thus keeping the Ponzi going even longer.

Tesla already has psycho name recognition in China and with the Chinese Americans who also can't wait to rub their new Tesla in the face of all their friends...because that's what Chinese people do.

This one will be interesting...Elon may get his desperate cash infusion from the capital markets after all.

In reply to by jcaz

jcaz Antifaschistische Tue, 07/10/2018 - 09:49 Permalink

My bad, I was laughing too hard when I saw the news......

The Chinese people will have little to do with any of this-  if Elon is desperate enough to hook up with these penny-stock venues,  he's not going to last long enough to see even a brick of this "factory" built.

The "company" Elon has aligned himself with here has only $2.2B in "assets" in a Chinese valuation system- tells you all you need to know.....

A Chinese MOU isn't worth the paper it's written on.

In reply to by Antifaschistische

Last of the Mi… jcaz Tue, 07/10/2018 - 10:47 Permalink

The Tesla big top 3 ringed circus is growing long in the tooth to US investors. Once Elon gets past his circle of friends within the masters of the universe group it is nown more and more as a "boutique' stock and price has nothing to do with value. The energy required to maintain that difference between value and price becomes more every day. It's the classic definition of a stock priced by nothing emiprical, just "enthusiasm". 

Propping it up with trillions of social media money is easy, letting it down slowly is a real bitch. Once the enthusiasm is gone, you have nothing, hell even the product produced is suspect to say nothing of the manufacturing processes involved. 

Shorting is like betting on time and place of a  plane crash that happens suddenly and violently and it is a classic sucker bet. 

It's a turd, Jim. Get the hell out. 

In reply to by jcaz

LadyAtZero Yellow_Snow Tue, 07/10/2018 - 11:12 Permalink

After we have all sweated through Tesla's pain he gets up and moves to CHINA ?  

Why not build the factor(ies) in our own Motown, Detroit? 

Or in low cost-of-living state in the USA?

Ohio?  

Tennessee?  

Alabama?  

Oklahoma? 

Nevada, where he makes batteries?

There are sections of California  that need jobs too -  Fresno, Bakersfield, Redding,  Willits,  Ukiah.

 

 

 

In reply to by Yellow_Snow

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In reply to by TheSilentMajority

D503 Tue, 07/10/2018 - 07:54 Permalink

Great. 500,000 more behind schedule, incendiary, polluting, expensive, energy inefficient, virtue signaling machines to look forward to.