Is Another Tesla Factory Coming to China? Rumors Addressed

Neither Tesla (TSLA) nor founder Elon Musk has announced official plans of building another factory in China, though it could be a smart move. Tesla’s Shanghai Gigafactory is reportedly surpassing production when compared with its California-based factory.

Though Musk hasn’t provided any confirmation or hint that another Tesla factory is coming to China, there is another Gigafactory, located in Germany, that's scheduled to begin production in the near future.

After investing nearly $7 billion into its Germany-based Gigafactory, Tesla may be reaching a point where it can begin vehicle production. Its newest factory, located near Berlin, is reportedly waiting for local officials to give the “all clear” before it can happen. Bloomberg shared that Musk has run into some “legal challenges,” though he wants to begin production of Model Y cars either this month or in Dec. 2021.

During a Tesla event held near the factory’s site, Musk reportedly said he will “source batteries from Tesla’s facilities in China until a cell factory in Germany is completed.” Musk added that he would like to see an output of at least “5,000 to 10,000 vehicles a week at Gruenheide.”

Though Tesla’s Germany-based factory is being held up due to environmental concerns, Tesla continues with production at its other factories. Tesla has a factory in Fremont, Calif., that spans nearly 5.3 million square feet, not including the 370 acres of land used for office space. It's considered “one of the world’s most advanced automotive plants.”

Tesla also has a Tesla Gigafactory located outside of Sparks, Nev. This factory is used to manufacture Model 3 series motors, battery packs, and energy storage products, according to Tesla’s website. The current factory covers more than 1.9 million square feet.

Tesla Gigafactory 2, located in Buffalo, N.Y., is primarily used to produce solar cells and modules. The facility, which encompasses 1.2 million square feet, employs approximately 800 people and is on track to create “5,000 clean energy jobs in the state,” according to Tesla.

The electric car giant also has a factory in Shanghai, China. Despite the supply chain issues countries have been experiencing, Tesla’s Shanghai factory was able to “do better than other companies,” as it was able to secure parts by having them flown in from around the globe.

Tesla has ramped up production at its Shanghai Gigafactory with plans of “exporting Chinese-made vehicles to Europe,” according to CNN Business. The company reportedly wants to start sending out its Model 3 sedan from its China location to Italy and Switzerland.

With the company able to cut its costs by using more Chinese parts, it may be able to afford another factory once it gets its Germany-based factory up and running. According to Tesla’s third-quarter earnings report released on Oct. 20, the company had $1.62 billion in generally accepted accounting principles (GAAP) net income and $12.06 billion in automotive revenue. On Nov. 4, Tesla Inc.’s stock closed at $1,229.91.