Tesla has commenced deliveries of its Model 3 from its $2-billion Shanghai-based facility. The milestone was remarkable because it took place barely a year after the facility broke ground in January 2019. That would only make the Shanghai factory 357 days old.
The company said the plant successfully produced the targeted 1,000 units a week for the official delivery to finally happen. That means the electric vehicle maker made about 280 cars on a daily basis. Tesla executives who attended the ceremony said Model 3 sales are so far "very good."
Moving forward, the Shanghai plant will aim to make 3,000 vehicles weekly, the company announced during the event on December 30. Of that, the company hopes that as much as 80% of Model 3 parts will all be coming to China by the end of next year, a Tesla official said. That year, all Tesla cars running in the country will be localized, the company said. As of now, only 30% of the Model 3 parts are from the country.
As the company doubles the production of its vehicles, it will also expand the number of its charging stations across the country. Accordingly, Tesla will also hire more after-sales workforce from 600 to 1,500 to man its service centers.
Tesla is currently selling its China-made Model 3 for $50,000 before subsidies which is more expensive than the units sold in the United States.
China, nevertheless, remains to be the biggest market for electric vehicles anywhere else in the world, including North America. In 2018, there were about 1.3 million green vehicles sold in the country.
Tesla faces tough competition with homegrown electric vehicle company, NIO. The company announced its Q3 2019 earnings that beat investors' estimates. Its shares soar coinciding with Tesla's event marking its first delivery from Shanghai. NIO debuted on the New York Stock Exchange in 2018 but with how its shares have been performing, analysts believed the company is losing finances.
Tesla's financial standing in China is seemingly on a bleak spot as well. Its official delivery from the Shanghai plant took place after Elon Musk confirmed it received a $1.4 billion five-year loan plan from different Chinese banks. The banks include China Construction Bank, Agricultural Bank of China, Industrial and Commercial Bank of China, and Shanghai Pudong Development Bank.
According to unnamed sources, all funding went to the completion of the Shanghai facility. This loan amount was on top of other existing loans Tesla had with other Chinese banks.
