Giga Shanghai

Tesla Giga Shanghai (Chinese: 特斯拉上海超级工厂, or Gigafactory 3)[3] is a factory in Shanghai, China operated by Tesla, Inc.[4] The facility currently hosts the final assembly of the Tesla Model 3 and will produce the Tesla Model Y, with Model Y deliveries slated to begin in January 2021. The factory's initial production rate target is 3,000 cars a week, eventually ramping up to 250,000 electric cars per year.[5][1] The first assembled Model 3s were delivered in December 2019,[6] just twelve months after Tesla began site grading on the Gigafactory in December 2018.[7]

Tesla Giga Shanghai
Gigafactory 3 on Shanghai peninsula
LocationLingang, Pudong, Shanghai, PR China
Coordinates30.87°N 121.77°E / 30.87; 121.77
Products
Employees2,000[2]
Area864,885 m2 (9,300,000 sq ft)[1]
Address浦东新区南汇新城镇同汇路168号D203A[1]
Owner(s)Tesla (Shanghai)

The Shanghai municipal government approved the agreement to build the production facility in July 2018, and a long-term lease was signed for about 86 hectares (210 acres) of land in October 2018.[1][8] Construction began in December 2018 with the installation of secure fencing and site offices. The General Assembly Building was nearly complete by August 2019, and manufacturing line equipment was being installed for both batteries and automobiles. The plant began initial production of Tesla Model 3 cars in October 2019,[9] with additional production facilities for motors, seats, and powertrain assemblies under construction in late 2019 with expected completion by March 2020.[10]

Tesla is also building engineering and design teams in China.[11]

Description

The factory site is within Pudong District, with the western edge bordering Fengxian District.

History

Background

The Tesla (Shanghai) company was formally established 8 May 2018, with an authorized capital of 100 million yuan, wholly owned by Tesla Motors Hong Kong.[12] In July 2018 Tesla CEO Elon Musk signed an agreement with the Shanghai regional government to build its third Gigafactory, and the first in China.[13]

On 8 August 2018, compulsory purchase order Shanghai [2018] No. 090 was issued by Pudong New Area Planning and Land Administration, with a closing date for objections of 14 August 2018, and finalization scheduled to occur on 20 August 2018.[14] On 26 September 2018, the bidding process for the newly acquired plots Q01-05 in the area designated as 04PD-0303 were advertised, with the restriction that the land be used for electric car manufacturing, with a minimum investment requirement. The investment requirement of 10.85 million yuan per mǔ (per 666.7 m2 or 7,200 sq ft) equated to a total minimum investment of 14 billion yuan ($2 billion US).[15][16]

Land purchase

The bidding process ran between 17‒26 October 2018, with the proviso that if there was only one bidder meeting the requirements by 11:30 on 17 October 2018, then the process could be closed and finalized early.[15] Tesla won the long-term lease for 86 hectares (210 acres) of land in Lingang, Shanghai on 17 October.[8][17][18]:5:21 Tesla (Shanghai) was the only bidder, with its bid of 973 million Chinese yuan for the 50-year lease covering the 864,885-square-metre (86.5-hectare) site, with the capital coming from local Chinese banks.[19] The Shanghai Land Transfer contract No. 14 with Tesla (Shanghai) required construction work to begin within 6 months, and be completed within 30 months, with production started after 36 months, and full minimum tax revenues being paid after 60 months.[20] The Land Transfer was scheduled to occur on 12 December 2018, and limits the maximum size of above-ground buildings to 1,729,770 square metres (18,620,000 sq ft) in area [sic] with a maximum height of 30 metres (100 ft).[21] Up to 60,541 square metres (650,000 sq ft) of the area can be used for non-production office buildings.[21] Phase 1 of the project will manufacture Tesla Model 3 and Tesla Model Y cars, with a target production rate of 250,000 electric cars per year.[1] Tesla stated that it planned to eventually be able to produce 500,000 electric vehicles per year at the site.[8][17]

The public environmental impact consultation for Phase 1 of the project was opened on 24 October 2018 and scheduled to run for ten working days.[1] Capital expenditures covering the land purchase and initial design costs for Gigafactory 3 were scheduled to occur in the fourth quarter of 2018.[22] The purchase was aided by a loan from Chinese banks, and converted to a $1.4 billion loan in late 2019, also by Chinese banks.[23]

Construction

A construction permit was granted by the Shanghai municipal government authorizing work to begin after 29 December 2018. The project contractor is China Construction Third Engineering Bureau Co., Ltd., part of China State Construction Engineering, a large state-owned construction company.[24]

By December 2018, construction activity at the site was underway with site grading.[7] Shanghai Mayor Ying Yong visited the site on 5 December.[25][26] A subsidiary of China Minmetals was making preparations for piling foundations.[27] Shanghai Construction Group was one of the companies bidding for part of the larger construction contract.[27]

On 7 January 2019 the groundbreaking ceremony was held.[28] By March, foundation work in some areas of the large facility was in place and structure is being erected, with crews operating at the site on multiple shifts to accelerate construction.[29]

By early August 2019, the building exteriors were nearly complete, and the general assembly building was being fitted with manufacturing equipment, with a target to begin production in November.[30] The plant received its "comprehensive acceptance certificate" on 19 August.[31]

In the 3Q2019 quarterly investor call on 23 October 2019, Tesla reported that it is ahead of schedule with getting the factory into production. Moreover, it was built in just ten months, is ready for production, and was built for approximately 65% less capital expenditure per unit of manufacturing capacity than had been the Model 3 production system in the US. General assembly of the initial Tesla Model 3s was operating by October 2019,[9] with 30% of the car coming from China.[32]

Production

Giga Shanghai currently does final assembly of Model 3 vehicles which began in December 2019, with expectation to begin Model Y final assembly later in 2020. While initially, assembly is accomplished with parts and subassemblies that are shipped into the factory from the US, a major push during 2020 will be to gradually increase the "Made in China" (MIC) content in the car as Tesla China manufacturing matures.[33] As of March 2020, MIC Model Y production is slated for January 2021. Production line capacity of Giga Shanghai is aimed at 5,000 cars per week, and if achieved and sustained could result in an annual capacity of more than 250,000 vehicles.[33][17] Once the factory has been fully built out and production has fully ramped, Tesla plans for the factory to reach an annual production capacity of about 500,000 vehicles for Chinese consumers.[8]

Transport truck trailer rigs moved cars out by early December 2019,[34] and the first 15 cars from the new factory were delivered on 30 December 2019, to Tesla employees.[35] The first cars to be produced at the Gigafactory and delivered to Chinese customers were delivered on 7 January 2020.[36][37] Production rate was approximately 1,000 cars per week in early 2020,[38] made by a single shift of workers[39] with a total production line capacity of 2,000 cars per week when Saturday overtime is included.[33]

The gigafactory Shanghai was temporarily shut down for approximately two weeks by order of the government on 29 January 2020 due to the COVID-19 pandemic.[40] Production resumed 10 February, as did for suppliers and other companies around the country.[41] Several precautions were taken to prevent virus spread,[42] so preliminary plans indicate Tesla could add a second shift of production by the beginning of Q22020 which would increase line capacity to approximately 3,500 vehicles per week.[33] By the end of the year, it reached 8000 vehicles per week,[43] and some of them were found to be right hand drive for export purpose.[44]

See also

References
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