China is the biggest auto market Tesla is eyeing on
From January 7 Tesla will begin the delivery of its Tesla Model 3 sedans which were made in the newly built factory in China. This was the first factory of the company operationalized outside of the US. This is a significant milestone for the automaker as the deliveries of these hybrid cars in the Chinese market will open the new horizon for the company. China is the biggest auto market in the world and Tesla will try to cut out the niche for its vehicles.
Shanghai factory will deliver an initial lot of the batch. At the beginning of this week, the employees took delivery of more than 12 cars of Tesla Model 3. In its third-quarter report company is expecting significant growth in market share for its Model 3 cars. The cars produced in China for the Chinese market have its benefits as it helps Tesla to save money by avoiding some tariffs. This is one of those steps that the company is trying to get sustained profitability.
Tesla’s Chinese factory will produce cost-effective cars
The sales of electric vehicles were down for the rest of the car manufacturers as the government has pulled some of the subsidies for the industry. But this issue seems to be not concerning the company and its visionary CEO Elon Musk. They are pretty optimistic about the growth as the Chinese factory has the ability to produce 150,000 cars per year.
The deal was signed back in July 2018 to build a factory in Shanghai. This was the big achievement for the company as before the foreign companies were only allowed to have joint ventures with the local companies. The old rule to be phased out till 2022, while Tesla became the first to be benefited by this rule change.