Tesla breaks ground on Shanghai factory

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Tesla CEO Elon Musk, center, and Shanghai’s Mayor Ying Yong, right, attend the Tesla Shanghai Gigafactory groundbreaking ceremony in Shanghai. (Reuters)
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The land of Tesla Gigafactory at a groundbreaking ceremony of Tesla Shanghai Gigafactory in Shanghai. (Reuters)
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A Chinese flag is seen on the land secured by Tesla for its Gigafactory in Shanghai, China. (Reuters)
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Tesla plans to produce its Model 3 and Model Y cars in the initial phase of production at the Shanghai plant. (Reuters)
Updated 07 January 2019

Tesla breaks ground on Shanghai factory

  • ‘Looking forward to breaking ground on the @Tesla Shanghai Gigafactory today!’ Musk wrote in a post on Twitter
  • Tesla has said it aims to produce its Model 3 mass-market car from 2019 at the new plant

BEIJING: Tesla broke ground Monday for a factory in Shanghai, its first outside the United States.

CEO Elon Musk said Monday on Twitter that the company will start production in China of its Model 3 and a planned crossover by the end of the year.

Tesla announced plans in July to build the Gigafactory 3 facility in China, the biggest electric vehicle market, despite trade tension between Beijing and Washington. That followed Beijing’s announcement it would end restrictions this year on foreign ownership of electric vehicle producers in an effort to spur industry development.

“Looking forward to breaking ground on the @Tesla Shanghai Gigafactory today!” said Musk on Twitter. “Aiming to finish initial construction this summer, start Model 3 production end of year & reach high volume production next year.”

China’s state broadcaster CCTV showed Musk and other Tesla and local officials attending a chilly ceremony in the rain Monday in Shanghai’s outskirts.

The Shanghai factory will produce “affordable versions of 3/Y for greater China,” Musk said. The company refers to a planned crossover that has yet to receive a formal name as the Y.

Higher-priced models will be built in the United States for export to China, Musk said.

Tesla, based on Palo Alto, California, global automakers including General Motors Co., Volkswagen AG and Nissan Motor Corp. that are pouring billions of dollars into manufacturing electric vehicles in China.

Local production would eliminate risks from tariffs and other import controls. It would help Tesla develop parts suppliers to support service and make its vehicles more appealing to mainstream Chinese buyers.

Tesla said in October it had signed an agreement for a 210-acre (84-hectare) site in the Lingang district in southeastern Shanghai.

Shanghai is a center of China’s auto industry and home to state-owned Shanghai Automotive Industries Corp., the main local manufacturer for GM and VW.

Tesla has yet to give a price tag but the Shanghai government said it would be the biggest foreign investment there to date.

The company faces competition from Chinese brands including BYD Auto and BAIC Group that already sell tens of thousands of hybrid and pure-electric sedans and SUVs annually.

Until now, foreign automakers that wanted to manufacture in China were required to work through state-owned partners. Foreign brands balked at bringing electric vehicle technology into China to avoid having to share it with potential competitors.

The first of the new electric models being developed by global automakers to hit the market, Nissan’s Sylphy Zero Emission, began rolling off a production line in southern China in August.

Lower-priced electric models from GM, Volkswagen and other global brands are due to hit the market starting this year, well before Tesla is up and running in Shanghai.


Africa development bank says risks to continent’s growth ‘increasing by the day’

Updated 54 min 38 sec ago

Africa development bank says risks to continent’s growth ‘increasing by the day’

  • The trade dispute between US and China has roiled global markets and unnerved investors
  • African nations need to boost trade with each other to cushion the impact of external shocks

DAR ES SALAAM: The US-China trade war and uncertainty over Brexit pose risks to Africa’s economic prospects that are “increasing by the day,” the head of the African Development Bank (AfDB) told Reuters.
The trade dispute between the world’s two largest economies has roiled global markets and unnerved investors as it stretches into its second year with no end in sight.
Britain, meanwhile, appears to be on course to leave the European Union on Oct. 31 without a transition deal, which economists fear could severely disrupt trade flows.
Akinwumi Adesina, president of the AfDB, said the bank could review its economic growth projection for Africa — of 4 percent in 2019 and 4.1 percent in 2020 — if global external shocks accelerate.
“We normally revise this depending on global external shocks that could slowdown global growth and these issues are increasing by the day,” Adesina told Reuters late on Saturday on the sidelines of the Southern African Development Community meeting in Tanzania’s commercial capital Dar es Salaam.
“You have Brexit, you also have the recent challenges between Pakistan and India that have flared off there, plus you have the trade war between the United States and China. All these things can combine to slow global growth, with implications for African countries.”
The bank chief said African nations need to boost trade with each other and add value to agricultural produce to cushion the impact of external shocks.
“I think the trade war has significantly impacted economic growth prospects in China and therefore import demand from China has fallen significantly and so demand for products and raw materials from Africa will only fall even further,” he said.
“It will also have another effect with regard to China’s own outward-bound investments on the continent,” he added, saying these could also affect official development assistance.
Adesina said a continental free-trade zone launched last month, the African Continental Free Trade Area, could help speed up economic growth and development, but African nations needed to remove non-tariff barriers to boost trade.
“The countries that have always been facing lower volatilities have always been the ones that do a lot more in terms of regional trade and do not rely on exports of raw materials,” Adesina said.
“The challenges cannot be solved unless all the barriers come down. Free mobility of labor, free mobility of capital and free mobility of people.”