US electric vehicle manufacturer Tesla is ramping up its production capacity in China, with the goal output of at least 4,000 electric sedans per week by the middle of this year. The claim comes as the company released its first-quarter earnings report, which was published on Wednesday.
According to its earnings report, the company still managed to hit its targets despite the economic downturn caused by the coronavirus pandemic. During the first three months of this year, Tesla's revenues grew by a respectable 32 percent when compared to the same period last year. The company reported revenues of $5.95 billion for the quarter with a gross margin of 25.5 percent, the highest in over six quarters.
Despite reporting better-than-expected results for the quarter, Tesla acknowledged that the coronavirus pandemic has brought with it some challenges to the company's operations and its supply chains. The company stated during its first-quarter earnings call that it will be difficult to predict when the global supply chain and vehicle manufacturing industry will recover to normal levels.
Based on its released data, the gross margin for Tesla's China-made Model 3 sedan is now coming very close to its margins for its vehicles made in the United States. The increased profitability of its China-made vehicles can be attributed to the company's recently built Gigafactory in Shanghai. The figures it reported has also driven Tesla to further increase capacity in its Chinese factory, which currently has an estimated annual output of at least 200,000 sedans.
On the same day as when it published its earnings report, the company's official account on China's Weibo platform unveiled the official prices of its China-made model 3 Standard Range plus model.
Tesla announced on the Chinese social media page that it will be reducing the price of the particular model by around 300,000 yuan to make it more accessible to customers. It added that the discount is part of its efforts to meet China's subsidy requirements for new energy vehicles sold in China this year.
Tesla CEO Elon Musk noted during the company's earnings call that he would be revealing details about its next Gigafactory within one to three months. Tesla currently had four Gigafactories, two of which are in the US, one in China, and one in Europe. Its European Gigafactory, which is located in Berlin, is still under construction and is expected to go into production by 2021. Musk confirmed that the next Gigafactory will be located in the US.
