Asian Tech Press (May 11) -- Tesla CEO Elon Musk said Tesla will expand its Shanghai plant despite the fact that the company's sales in China fell sharply in April, not a single car was exported.
Speaking at the Financial Times Future of the Car summit on Tuesday, Musk said China is expected to account for 25% to 30% of Tesla's global business in the long run.
In setting up Tesla's Shanghai gigafactory, he had indicated to the Chinese government that they would not do a locally-owned factory, Musk said.
The world's richest man said, "Things are proceeding fairly well." Tesla plans to make the Shanghai gigafactory "the world's largest vehicle export hub."
Tesla's Shanghai plant delivered 484,130 electric vehicles in 2021, accounting for 51.7% of the U.S. automaker's total global deliveries that year. The company produces its Model 3 and Model Y cars in the gigafactory Shanghai, which serves the Chinese market and acts as an export hub to Germany and Japan.
However, Musk said this time that Tesla does not expect to open additional factories in China in the near future, but plans to expand production at its Shanghai plant.
Tesla on Wednesday made its first exports from China since its Shanghai plant resumed production on April 19.
The ship Glovis Splendor, carrying 4,767 Tesla cars, departed early on Wednesday from Shanghai Nangan and headed for Port of Koper in Slovenia.
Slipping Tesla Sales in China in April
Numerous factories were shut down, including Tesla's Shanghai factory, after the financial hub went into lockdown from March to combat the spread of COVID-19.
Tesla's auto plant resumed operations on April 19 as Shanghai began to ease Covid lockdown.
The Shanghai plant produced 10,757 vehicles in April and delivered 1,512 of them, down 97.7% from 65,814 units in March, according to data released Tuesday by the China Passenger Car Association (CPCA).
In April, Tesla did not export a single electric vehicle from its Shanghai plant, the data showed.
In response, Tesla said that some export vehicles are already being shipped to the Asia-Pacific region, and another large batch of products will be loaded in the near future for shipments to Europe and other places.
After resuming operations, those vehicles in transit and ready for export have not yet been recorded as completed exports, especially with the significant reduction in cross-border logistics efficiency and transportation disruptions, Tesla added.
The 22-day shutdown of Tesla's Shanghai plant was its longest since it opened in 2019, resulting in an output loss of more than 50,000 vehicles, according to calculations from ome industry sources.
"We've lost about a month of build volume out of our factory in Shanghai due to Covid-related shutdowns," said Tesla CFO Zachary Kirkhorn, during a first-quarter earnings call last month.
Kirkhorn added, "Production is resuming at limited levels, and we're working to get back to full production as quickly as possible. This will impact total build and delivery volume in Q2."
For now, Tesla is still working to increase production in an effort to bring the output at its Shanghai plant back to pre-epidemic levels.
But according to an internal memo, Tesla has again suspended most production at its Shanghai plant due to parts supply issues. The plant was running only a portion of its production line on Tuesday, with output of no more than 200 vehicles.
Earlier Tesla's Shanghai plant was producing about 1,200 cars a day since it resumed operations.
"I've had some conversations with the Chinese government in recent days, and it's clear that the lockdowns are being lifted rapidly, so I would not expect this to be a significant issue in the coming weeks," Musk said in the interview with the Financial Times.
