Skip to Content

Tesla says it will build a factory in China that can produce 500,000 cars a year

July 10, 2018

The move could help cement the brand in China and circumvent steep tariffs on the cars.

The news: Tesla has signed an agreement to build what it’s calling “Gigafactory 3” in Shanghai. Construction will begin as soon as all permits are received, and it’s estimated to take two years to complete.

Full speed ahead: When the facility hits full throttle, Tesla estimates, it will be able to churn out 500,000 cars a year for Chinese customers—though meeting production estimates hasn’t been one of Tesla’s strong suits.

First of its kind: Unlike other foreign automakers that have set up plants in China, Tesla will be the sole owner of the new production facility. In the past, outside car companies were required to partner with Chinese companies. (UPDATE: According to Reuters, a government official has said that China is speeding up the rate at which the country plans to relax restrictions on foreign investment in its automotive industry.)

Why it matters: Tesla has been hit hard by the trade war between the US and China. It had to raise prices on its Model X and Model S cars by $20,000 for Chinese customers. The company is following in the footsteps of Harley-Davidson—which announced it’ll shift more production outside the US to avoid EU tariffs—and moving manufacturing overseas to lower costs.

Keep Reading

Most Popular

Here’s how a Twitter engineer says it will break in the coming weeks

One insider says the company’s current staffing isn’t able to sustain the platform.

Technology that lets us “speak” to our dead relatives has arrived. Are we ready?

Digital clones of the people we love could forever change how we grieve.

How to befriend a crow

I watched a bunch of crows on TikTok and now I'm trying to connect with some local birds.

Starlink signals can be reverse-engineered to work like GPS—whether SpaceX likes it or not

Elon said no thanks to using his mega-constellation for navigation. Researchers went ahead anyway.

Stay connected

Illustration by Rose Wong

Get the latest updates from
MIT Technology Review

Discover special offers, top stories, upcoming events, and more.

Thank you for submitting your email!

Explore more newsletters

It looks like something went wrong.

We’re having trouble saving your preferences. Try refreshing this page and updating them one more time. If you continue to get this message, reach out to us at with a list of newsletters you’d like to receive.