Tesla in Shanghai

Electric vehicle maker Tesla Inc delivered the first batch of sedans produced by its Shanghai plant on Dec 30, less than a year after the gigafactory broke ground.

That is its first factory outside the United States and the project is the largest ever foreign manufacturing investment in Shanghai. The factory is located in Lingang Area, a high-end manufacturing park in the southeastern harbor of Shanghai. It has a designed annual capacity of 500,000 electric cars.

Without the support of the central and Shanghai governments, Tesla would be unable to build up a factory, and start mass production and delivery at such fast speed, said Allen Wang, general manager of Tesla China.

As the first project after China lifted restrictions on foreign investment in the auto industry, the local government has carried out "a lot of process optimization to greatly reduce the approval time," said Tesla's Global Vice-President Tao Lin.

Tesla's gigafactory in Shanghai can produce 280 vehicles per day and will double its production capacity this year.

The sedans' components will be completely domestically produced by the end of 2020, according to Song Gang, the plant's manufacturing director. Currently, 30 percent of the components are produced locally.

Tao said the China-made Tesla cars will feature many Chinese elements and localized transformations. For example, the new Model 3 sedans will provide traditional Chinese games such as mahjong and Chinese poker. Prior to the made-in-China Model 3 cars, the price of an imported Tesla Model 3 vehicle stood above 439,900 yuan (about $63,000) in the Chinese market.

The Shanghai-made sedans start at 355,800 yuan. In its financial report, Tesla believes that China could become the biggest market for the Model 3.

Even though foreign investment worldwide has declined for three consecutive years, it has maintained momentum with new stores and factories in Shanghai.