US electric car maker Tesla opens new factory in Shanghai

Reuters - U.S. electric car-maker Tesla Inc. on Monday broke ground on its Shanghai factory, becoming the first to benefit from a new policy allowing foreign car-makers to set up wholly-owned subsidiaries in China. CEO of Tesla Elon Musk and Mayor of Shanghai Ying Yong attended the ground-breaking ceremony, along with other government officials and business representatives. The factory is Tesla's first outside the United States, and also the biggest foreign-invested manufacturing program in the history of the Chinese city. The factory is located in Lingang Area, a high-end manufacturing park in the southeast harbor of Shanghai. It will cover over 860,000 square meters, which is the area of 121 standard football fields. The factory will combine functions including research and development, manufacturing and marketing, with a designed annual capacity of 500,000 all-electric cars. The Shanghai factory is expected to mass produce Tesla's latest Model 3 by 2020. Tesla signed the cooperation deal with Shanghai municipal government in July 2018. In October, the company was approved to use an 864,885-square-meter tract of land in Lingang for its Shanghai factory. Such a quick process is largely credited to China's efforts to open wider to the outside world. The country removed foreign ownership limits for special vehicle and new energy vehicle manufacturing in 2018. Tesla was the first foreign car-manufacturer allowed to build a wholly-own subsidiary in China. Tesla entered the Chinese market in 2014, but only by export, with the prices of its vehicles in China nearly twice that in the U.S. market. In 2017, the company enjoyed a sales value of over two billion U.S. dollars in China, growing by more than 90 percent year on year. China has become its second largest market in the world. The factory in Shanghai is expected to further increase its sales volume and cut its costs.