Tesla to begin construction of Gigafactory 3 in China

Environmentalists have a cause for celebration, as Tesla is set to begin construction of its monstrous Gigafactory 3 in Shanghai, China. As the name suggests, it will be third of Tesla’s famous manufacturing behemoth, with the other two being in Storey County, Nevada and the other one in Buffalo, New York. The company finalized a deal for a land of 210 acres, the ceremony for which was attended by senior officials of Shanghai Lingang Area Development Administration.

This marks the first time that the company’s Gigafactory is being constructed outside the United States. A vice president of the iconic car maker said this and other factories highlight Tesla’s commitment to its mission to facilitate a global transition to sustainable energy through electric vehicles and clean energy generation and storage technology. It is expected that this undertaking will be capital efficient and have rapid build capabilities.

The factory in Shanghai will reportedly be capable of building 500,000 electric vehicles in a year. The construction of the factory would take about two years, after which it will require an additional two years before the factory reaches its maximum production capacity of half a million vehicles a year. More importantly, this also marks a change in policy in the Chinese government. Previously, foreign companies had to enter into a 50-50 joint venture with a Chinese partner to build a factory in China. But the Gigafactory 3 will be wholly owned by Tesla. This could be an important milestone signaling significant changes in economic policies in China.