Tesla will open a Chinese design and engineering center

Tesla raises prices in China due to tariffs.
Image: YouTube | Tesla

On January 7, Tesla hosted an event at its Shanghai-based factory to distribute vehicles to buyers of its first Chinese-manufactured Model 3. CEO Elon Musk appeared at the proceedings and made two major announcements. First, the electric car maker will open a design and engineering facility that will create an original car that will be distributed worldwide. Moreover, Gigafactory 3 will begin production of the firm’s forthcoming Model Y SUVs.

Tesla’s Chinese Designed Vehicle

Notably, Musk did not offer many details on his firm’s Chinese design center. However, the executive did explain why he wanted to open a Sino engineering facility. He lauded the nation’s art as among the best in the world and wants to incorporate its influence into future Tesla vehicles.

Musk also said he wants his corporation’s first Chinese engineered car to feature an unconventional design. The billionaire said he wants the battery-powered vehicle to be “something kinda radical, like Cybertruck.”

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While Tesla’s light pickup did receive criticism for its boldly angular design, it also received over 250,000 preorders. Besides, police departments in Dubai and Mexico have ordered Cybertrucks intending to use them as patrol vehicles. Consequently, the Fremont, California-based manufacturer could find success in distributing an aesthetically unusual electric car across the globe.

It also makes economic sense for Tesla to design a new vehicle in China. The Communist nation’s relatively low labor and materials cost will make its development cheaper than it would be in the United States. Also, the firm might be able to drum up more business in the region by positioning the car as an authentically Sino automobile.

Gigafactory 4 to Make Model Y SUVs

Tesla’s delivery event also served as its announcement that it will start producing Model Y SUVs at Gigafactory 3. Ahead of the facility’s opening, the manufacturer said it would use the plant to mass-produce Model 3 sedans. On Tuesday, Musk revealed the site would also be rolling out its Model Y compact crossover.

However, the executive did not say when Gigafactory 3 will be assembling its new SUV. Last March, the corporation announced that it would be manufacturing the Model Y in autumn 2020. Musk also revealed the standard edition of the SUV would seat seven, feature a 280-mile range, and would retail for $39,000.

In October, the firm revealed that the Model Y would be rolling out this summer. As such, Tesla could begin manufacturing its compact SUV in the United States and China simultaneously. Indeed, the carmaker recently said it’s ramping up production at Gigafactory 3 to assemble 3,000 vehicles per week.

Conversely, Tesla might be manufacturing Model Ys in China to lower costs and hit delivery quotas in its domestic market. In the past, the firm has struggled to meet demand due to inefficiencies within its U.S. production line. Also, the recent Sino-American trade deal might allow the carmaker to import its SUVs affordably.

Either way, Tesla’s expanded manufacturing capabilities indicate the firm will likely garner record-breaking sales this year. Moreover, its efforts to reach out to Chinese buyers could result in its hot streak continuing for years to come.


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