American electric car maker Tesla Inc. has currently put a stop to its plan to enlarge the Shanghai plant and buy land. The company wanted to make it a global export hub but it could not be done. According to those who are aware of this matter, such a company is doing this because the tension between the US and China is very high.
Let us know that former US President Donald Trump imposed a 25 percent higher tariff on the import of electric cars from China with the current tax which is still in force. In such a situation, Tesla cut production. Tesla had earlier planned to expand the exports of its Chinese-made entry-level Model 3, including the US.
While Tesla currently ships the China-based Model 3 to Europe, the company is also opening a factory in Germany. The Tesla Shanghai factory has been designed to produce 500,000 cars a year. Where currently 450,000 units of Model 3 and Model Y vehicles are being produced every year. But now the company has stopped thinking about taking the plot and increasing its production in China.
The Shanghai City Government has greatly facilitated the setting up of a wholly-owned unit of Tesla. Tesla’s Shanghai unit is the only foreign passenger car plant for which no joint venture has been done.
Tesla still owns the land, which was designed for production but is now used for parking at the Shanghai site. One of the people said that Tesla could expand capacity to more than 500,000 on its existing site. Another said that Tesla could acquire more land for more car production lines in the future.