SHANGHAI,CHINA - An aerial view of Tesla Shanghai Gigafactory on March 29, 2021 in Shanghai, China. Tesla Shanghai Gigafactory is reportedly producing vehicles at a rate of about 450,000 cars per year.
(Photo : Xiaolu Chu/Getty Images)
Tesla China is off to a great start this year, with data from the China Passenger Car Association (CPCA) showing that its wholesale figures in January 2022 reached 59,845 vehicles, a 286.5 percent jump compared to its numbers during the same period the year before. Those figures, however, represent a 15.5 percent decline compared to the record-setting results posted by Tesla China in December 2021.
Interestingly, the bulk of those vehicles ended up as exports. A total of 40,499 Tesla vehicles made in China last month were exported to foreign countries. That accounts for 67.7 percent of the total number of Tesla vehicles produced in China last month. The remaining 19,346 vehicles were sold by Tesla China locally in January 2022.
Giga Shanghai may have become Tesla's primary vehicle export hub globally, but the company is still looking for ways to make this gargantuan facility even more productive in the future. Tesla CFO Zachary Kirkhorn alluded to this during the firm's Q4 and FY 2021 earning call last month.
Tesla's Shanghai and Fremont factories running below capacity
According to Kirkhorn, the company's goals of achieving 50 percent growth year-over-year should be possible with just production from Gigafactory Shanghai in China and the Fremont Factory in California, though Tesla would still have to deal with supply chain issues.
Global Times reported that Kirkhorn added that these facilities have been "running below capacity due to macro challenges with supply and logistics." The Tesla executive also noted that based on what they are seeing right now, "the pace of growth in 2022 will again be determined by supply chain and logistics." Those factors, according to Kirkhorn, are quite difficult for them to forecast.
Expanding the production of Giga Shanghai is crucial for Tesla to meet the growing demands of consumers who want to buy their electric cars. According to local reports, Tesla's Shanghai facility had a capacity of about 450,000 vehicles last year. That number is expected to double in the next few years, with local estimates pointing to the idea of Gigafactory Shanghai hitting an annual production capacity of at least 1 million units soon.
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Expansion already underway at Giga Shanghai
Reports say expansion work started in December of last year, with Tesla already upgrading the production lines at Gigafactory Shanghai for higher capacity utilization. The amount of additional capacity is unknown at present, as per Electrive.
Renovation work has begun in the area where the Model 3 is being assembled. That has forced Tesla to produce the Model 3 and Model Y on the same line in the second hall, an area used exclusively for the latter's production before.
According to earlier statements, Tesla will invest up to 1.2 billion yuan (167 million euros) in the expansion of Giga Shanghai. The current work that is being done to upgrade the production lines is said to cost around 85 million yuan (11.7 million euros). That being the case, expect more work to be done in the Chinese factory as Tesla ramps up production of its famed electric vehicles.
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