Tesla, Inc., the American multinational corporation, signed agreements with Shanghai authorities that will allow it to open a plant in the Chinese city with an annual capacity of 500,000 cars. The announcement was made public on Tuesday.
“Shanghai will be the location for the first Gigafactory outside the United States,” Elon Musk, CEO Tesla was quoted saying.
“It will be a state-of-the-art vehicle factory and a role model for sustainability. We hope it will be completed very soon,” he added.
Musk said the plant, whose plans have been in the works for a year, would eventually have an annual production capacity of 500,000 cars, adding that he hoped it would be “completed very soon.”
The Chinese government has accepted the proposal. “We will fully support the construction of the Tesla factory,” said Chinese officials.
“Tesla is deeply committed to the Chinese market, and we look forward to building even more cars for our customers here,” the company said in its emailed statement.
Tesla may be holding off on “formal messaging” about its China plans until it shows more meaningful steps toward profitability, said Brad Erickson, an analyst at KeyBanc Capital Markets with the equivalent of a hold rating, The Economic Times reported.