The Model 3 and Model Y are incredibly important to Tesla’s overall expansion plans. With both vehicles aimed at the majority of the global market, there is significant pressure for Tesla to deliver premium EVs at relatively affordable rates. As it turns out, Tesla has a pretty nifty plan to ensure that its mass-market EVs are built in a cost-effective manner.
According to a recent Teslarati report, Tesla CEO Elon Musk has confirmed that the upstart carmaker is thinking of opening a factory in China , with a rough target for the facility’s launch set in about three years.
In a statement to analysts on Wednesday, Musk stated that the future China factory would be focused on manufacturing two of the carmaker’s most important vehicles; the Model 3 and the Model Y. Building the vehicles in China would enable Tesla to establish itself as an EV leader in the lucrative Asian country, which also happens to be the world’s largest automotive market.
“[Tesla] won’t be making Model S and Model X, but we’ll be making probably Model 3, probably Model Y primarily for the local Chinese market and it’s really the only way to make the cars affordable in China, but it’s three years out, so.”
Tesla’s planned China factory would be the first of many things. For one, Tesla would become the first foreign carmaker that would establish its presence in the economic superpower without having to collaborate with a local auto manufacturer, as noted in a CNBC report. Apart from this, the deal will further establish and strengthen the carmaker’s relationship with the Chinese government.
A rEVolution #TeslaModel3 #TeslaModelY #Model3 https://t.co/9AuPRaE2E5
— Remi Beaumont (@Remi_Beaumont) September 4, 2017
Having a dedicated facility in China for the manufacture of its two most affordable vehicles is a very strategic decision. For one, it would enable Tesla to tap into China’s massive and traditionally affordable workforce. This would then enable the upstart American carmaker to increase its production volumes to meet the projected demand for the mass market EVs.
Manufacturing the Model 3 and Model Y offshore would likely not give Tesla headaches in the long run, especially considering that the vehicles are specifically designed to be simple. The Model 3 is already Tesla’s simplest vehicle in its current lineup, and the Model Y, the company’s highly anticipated crossover SUV, is expected to be even easier to produce.
If Tesla’s plan for a China factory really does pan out, there is a very good chance that the upstart American EV maker could definitively initiate a change in the auto industry.
[Featured Image by Tesla ]