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

Chinese site Caijing.com 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.

41 thoughts on “China Will Ensure Tesla Survives by Getting Gigafactory Built and Operating in 6 to 12 Months Instead of Years”

  1. True, but what the hell. At least Mr. Musk got to pocket some big chinese money in the meantime to reinvest here in USA when shit hits fan over there!

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  2. No secret sauce in Tesla or SpaceX except constant engineering and rapid incremental change to designs, manufacturing, supply chains, sales, service, support. All the constant engineering is costly whether done by Tesla, SpaceX, Amazon, or in Chinese factories, but it ensures competitors must spend more faster to just catch up, and even more to outcompete.

    Copying tesla in October 2018 means you are unable to compete with Tesla today.

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  3. As of now, tesla has the absolute highest US labor content of any automaker in the world.

    By opening gigafactory 3, Tesla will reduce US labor content down to GM and Ford levels, but still be higher than Jeep-Fiat, as well as Toyota, Honda, Nissan, etc.

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  4. No. Only most of Asia is when the next big World War happens.

    The US can sit back and only get engaged as little as necessary, much like it did through most of WWI and WW2…only fully committing after it got others to slug it out first. Just ask the Russians who lost 30 million people in WW2 before D-Day ever happened.

    Trick is to get Japan to become a nuclear power. THEN sit back and let the naval war start…providing some lend-lease help here and there, while watching the tac nukes go off along the Sino-Indian border areas or on entire Chinese & Japanese fleets in the SCC.

    “Nobody wins a nuclear war?”, you’ll next say? Sorry but in that scenario it will clearly be proven that one nation will: The US of A.

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  5. Not a vacuum. But definitely a ‘low oxygen environment’ (to extend the analogy properly).

    Thing is that the US is not so tied into the global trading system as people mythically believe. Not when it comes to importing/exporting goods relative to its overall GDP.

    So it doesn’t NEED as much as other nations do. Either trading volume or the goods themselves. It buys what it PREFERS to get vs produce itself, instead. And even then that is less than 10% of its GDP.

    Which means it can play hardball in most trade negotiations…and win. Especially with ‘partners’ that depend upon US markets WAY more than the US depends upon them, like Canada, Mexico, Germany, China, etc.

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  6. It’s not about jobs in the US. It is about tech in the US and hurting China, which has been conducting a trade war with the US since the 70s…with treasonous help from our own elites…esp Republicans.

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  7. Lol…you realize all of the American Teslas are made in America. In particular the Model 3, this is one of the most “American made” vehicles on the road. They are largely just trying to mitigate risk (read tariffs and communist party) by building the supply chain for the local Asian demand there.

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  8. And this is precisely why I will never buy a Tesla. If Musk wants our allegiance, he needs to manufacture here in America.

    BTW: I do not use iPhone either – and never will. They are inferior and invasive. And the ramblings of Apple CEO Tim Cook are downright scary. Who does he think he is setting himself up to be some sort of God-Like arbiter of our Free Speech rights?

    Do us all a favor and take a pass on Apple. I wholly advise divesting.

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  9. Time to sell car companies stock and buy Tesla. And buy puts leaps against other car companies stocks. The change will be short and brutal.

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  10. I would say one Google search will provide a preponderance of evidence but you would not believe any of it. Your world view revolves around thinking that the US is the enemy because of her power. I say .

    And you know a sovereign can deny anything it wants … so never will your conviction occur… unless bombs fly. So your burden of proof can never be met.

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  11. Can you provide us with an example of IP that China stole?

    Not an allegation, a proven theft.

    One will be sufficient, thanks.

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  12. They make top notch electric motors, batteries, their cars are the safest ones on the road, and their software puts them in a league of their own. You really think China isn’t interested in that?!

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  13. As a Republican, I disagree with you. Tesla is an American company, employing thousands of Americans, which is something Trump loves.

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  14. “Foxconn is Apple’s longest running partner in building these devices. It currently assembles the majority of Apple’s iPhones in its Shenzen.” When IP is nutured by original company it can thrive in chinese manufacturing enviornment.

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  15. Trump and the GOP should be going for Tesla’s jugular over this. Constant harassment by OSHA, the IRS…nothing should be off limits.

    By building this gigafactory in China Tesla and Musk are committing de-facto economic jihad against the US.

    The era of globalization is over.

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  16. Fremont factory with all it’s bottleneck went from 1k/week to 5k/week in about 6 months. Why does it take 1 year to ramp up in China?

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  17. If I was Tesla (Musk), I would not build anything in China, they are known for stealing your I.P. If Tesla has any kind of “secret sauce” the Chinese will find it, copy it, and bury you.

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  18. Unlike the super slow pace construction happens in the US, China is fast, months rather than years.

    1000 cars per week July 2019
    5000 cars per week July 2020
    9000 cars per week July 2021

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  19. Tesla would “survive” without China. China can build things fast, they have a ton of people, and could pile them on this project to get it done faster. But the quality will suffer. The big projects that got built super fast were all pre-planned, and pre-manufactured and assembled on site.

    Reply

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