Tesla has started manufacturing vehicles in China around a year ago to boost its appearance in the biggest auto market in the world. At this time, the nation is nearly to become an even more serious part of its global strategy.
On Monday, Xinhua news (Chinese state-run media) reported that the electric carmaker, Tesla, will soon begin delivering Chinese-manufactured cars to Europe.
Tesla began making cars in China about a year ago to bolster its presence in the world’s largest auto market. https://t.co/tuO0tS49tV
— CNN Philippines (@cnnphilippines) October 21, 2020
Xinhua reports that the firm wishes to begin shipping Model 3 cars from Shanghai as quickly as the upcoming week to Italy, Switzerland, and Germany, among other destinations.
The company didn’t answer a request for comment from an international media, CNN Business. But, the director of operations and manufacturing for Tesla’s shanghai Gigafactory, Song Gang, called the action a crucial move in Tesla’s global layout.
Exporting vehicles to Europe
The state-run media cited him as saying that exporting to Europe means that the quality of ‘made in China Model 3 vehicles’ has been identified by the European market.
It could be a temporary step by the firm because Tesla is already creating another manufacturing plant in Europe. The previous year, it declared strategies for the new Gigafactory in Berlin, which is predicted to be completed sometime in the upcoming year.
Tesla isn’t the only foreign auto-manufacturer to depend on Chinese manufacturing to back its global sales. Besides this, there are few other vehicle giants, including BMW, that also have strategies to make and deliver Chinese-manufactured cars to Europe.
Elon Musk, the CEO of Tesla, has previously summoned the Shanghai Gigafactory, which initially started churning out vehicles around a year ago, a ‘design for future growth.’
The firm has described its stakeholders that the facility was around sixty-five percent cheaper to make than its Model 3 manufacturing plant in the U.S. Moreover, Sofya Bakhta, an analyst at Daxue Consulting (Chinese firm), said that it is significantly less expensive to make a Model 3 vehicle in China than in America.
She projected that when they compared with the American variant, the manufacturing cost of the Chinese Tesla Model 3 vehicles has slipped by twenty percent from twenty-eight percent. Le said that labor expenses alone are significantly lesser in China than in the U.S.
Daniel Ives, an analyst at Wedbush Securities, described that Tesla uses this as a planned advantage to go after other areas and pockets of Europe.