Shanghai Gigafactory 3 to open early, to shape future growth of Tesla

Tesla’s new electric car factory in Shanghai, completed in a solid 10 month construction schedule, will open early and become the “template for growth”, says CEO and co-founder Elon Musk.

Musk said the construction rate for the Shanghai facility was unprecedented, and its opening will significantly increase production, helping prompt the car-maker to declare it has “turned the corner” after posting a modest but significant profit that sent share prices soaring by more than 26% after close on Wednesday in the US.

“Having 3 Gigafactories will triple our output, and when you consider increased output per factory it will more than triple over time,” Musk said.

The learnings from the Shanghai Gigafactory, which is now ready to stamp, paint and build, will be a grounding force for Tesla’s next stage as it moves to launch the Model Y a full three months ahead of schedule and announce a site for Gigafactory 4 in Europe by the end of 2019.

“This month we started started pre-production at Giga Shanghai … from full bodies to paint to general assembly, this is a real factory with a tremendous amount of equipment in it,” said Musk.

“A lot of people see the outside shell which is enormous … [but] it was essentially below the water table in January.”

“More significant is that we were able to install massive stamping machines, a fully operational paint shop and a sophisticated general assembly line in parallel,” he said.

“I’m not aware of any factory of this magnitude in history being constructed in such a short time period of time.”

Once it is up and running, Tesla will work towards achieving a target of 3,000 units a week from Gigafactory 3.

Given the lessons learned from the 2018 Model 3 production ramp at Fremont Musk expects this will be a steady ramp that will soon exceed that 3,000 unit target.

Tesla even shared images of the interior of the factory – which it is understood will go into production as soon as Chinese regulators give the nod – showing a company that has come from “production hell” in 2018 to one that has truly come of age, and is on the brink of becoming a global force to be reckoned with.

Production of trial vehicles is already underway.

“We are already producing full vehicles on a trial basis, from body, to paint and to general assembly, at Gigafactory Shanghai,” the company said in its official Q3 update letter.

“We have cleared initial milestones toward our manufacturing license and are working towards finalizing the license and meeting other governmental requirements before we begin ramping production and delivery of vehicles from Shanghai.”

As a stepping stone to becoming a global auto giant, the Shanghai factory is strategically placed.

“China is by far the largest market for mid-sized premium sedans,” Tesla wrote.

“With Model 3 priced on par with gasoline powered mid-sized sedans (even before gas savings and other benefits), we believe China could become the biggest market for Model 3.”

Annual capacity for Gigafactory 3 is currently set at 150,000 units – but this will grow again once a second building at the site, originally believed to be a battery production facility, is complete.

This building will be the site for Chinese Model Y production, says Musk, the early launch for which is in part thanks to efficiencies achieved at the Shanghai site.