Tesla to Build New Factory in China to Double Vehicle Production - Report

Tesla's planned facility in China's financial capital will reportedly be able to produce up to 2 million vehicles per year, placing the electric vehicle maker on pace with traditional automakers who have also set up production in China.

According to a source, Tesla will start construction of a new facility in Shanghai next month, reiterating Elon Musk's vow to double electric vehicle production in China, The New York Post reported.

According to the report, the facility will be constructed near Tesla's present factory in Lingang, known as Gigafactory 3.

The company's expanded footprint in Shanghai can reportedly be attributed to the city's friendly business climate. Unlike other international automakers, Shanghai has exempted Tesla from forming a joint venture with a domestic automaker, allowing Musk's company to control the entire manufacturing facility. Tesla's sales in China have soared, and the company's Shanghai facility has become a vital export base for countries like Germany and Japan.

According to Reuters' calculations based on China Passenger Car Association data, which are cited by the newspaper, Tesla's China-made cars accounted for roughly half of the 936,000 vehicles it shipped internationally last year.

As for Musk's competitors, Toyota factories in China reportedly produced 1.6 million automobiles last year, while General Motors produced 1.4 million. By 2023, Volkswagen expects to have 1 million electric vehicles on the road in China.

And Tesla is on schedule to produce 1 million cars in China this year, including the Model 3 sedan and the Model Y crossover.