China Will Ensure Tesla Survives by Getting Gigafactory Built and Operating in 6 to 12 Months Instead of Years

Chinese site reports that Tesla Gigafactory 3 construction has started in China and that production will start and ramp up in the second half of 2019.

Tesla initially claimed vehicle production in Gigafactory 3 would start roughly two years after the facility’s construction begins, ramping to an output of 500,000 vehicles per year 2-3 years after. There are many critics and doubters.

Yes Six Months and Not Years, This is China High-Speed Construction

In 2018 Q3, Tesla said they were accelerating the construction of the China Gigafactory 3. They expect the construction to be rapid and capital-efficient because of lessons learned from the Model 3 ramp in Fremont and the battery ramp in Nevada.

Tesla appears to be leveraging the ability for workers and projects in China to have rapid construction. All kinds of large construction in China is performed at a blindingly fast pace. Massive shopping malls get built in months.

Beyond the lessons from the Model 3 ramp, they are getting strong Chinese government for its support.

There has been a 40% import tariff on the Model S and Model X due to the trade war. The Chinese government agreed to reduce and remove import tariffs on vehicles from the United States with the recent move to trade ceasefire. Tesla’s Model 3 and other models have been getting a lot of interest from Chinese consumers.

If there is a rapid and successful construction and ultra-fast ramp of Tesla car and battery production in China then it will be win for believers in China’s rapid construction capabilities and for Tesla.

If Tesla gets production and sales in China up to thousands per week in China by the end of 2019, then it will ensure their financial survival.

China has a large appetite for electric cars and should have 2 to 3 million electric cars sold in 2019 and possibly 3-5 million in 2020. Tesla brand is likely viewed much like Apple with its iPhone. Earlier Apple had large market share in China and still has about 7% market share against low-cost domestic android phone makers. A 10-20% market share in China would get Tesla to the 500,000 car per year capacity of the Gigafactory 3 within 3-4 years.