Tesla to start delivering Model 3 to China buyers in March

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Gigafactory 3 will be China's first wholly foreign-owned auto plant and should allow Tesla to minimise the impact of the trade war which has seen Beijing impose big tariffs on USA vehicle imports. He was in Shanghai for the ground-breaking ceremony.

He also said plans for the factory include finishing "initial construction this summer", starting "Model 3 production end of year", and reaching "high volume production next year".

Alan Kang, Shanghai-based analyst for consultancy LMC Automotive: "Tesla's sales [in China] have dropped over the past few months because of high prices caused by the tariffs".

'With the construction of the Shanghai factory, the faster the better (for Tesla)'.

China raised the import tariff on US-made cars to 40 per cent in July, but cut it back to 15 per cent from the start of this year as part of a ceasefire in a trade war with the United States.

The first of the new electric models being developed by global automakers to hit the market, Nissan's Sylphy Zero Emission, began rolling off a production line in southern China in August.

The so-called Gigafactory is China's first wholly foreign-owned auto plant, a reflection of China's broader shift to open up its vehicle market, even amid a trade war with the United States which has seen a rise in tariffs on cars imported from the U.S.

China is the world's largest auto and NEV market, with Beijing aspiring to become the global NEV leader with technologies that meet the highest worldwide standards by 2025.

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Higher-priced models will be built in the USA for export to China, he said.

Tesla said in October it had signed an agreement for a 210-acre (84-hectare) site in the Lingang district in southeastern Shanghai.

Operating at full capacity, Tesla's new facility in China is expected to produce as many as 500,000 vehicles per year.

"Shanghai Giga production of Model 3/Y will serve greater China region", Musk tweeted Sunday.

Musk had hinted recently at an upcoming Shanghai trip to break ground for the plant but Monday's event was not publicly announced until the Tesla CEO broke the news in a series of tweets earlier in the day.

Shares in Chinese suppliers to Tesla, including Tianjin Motor Dies and VT Industrial Technology, rallied on Monday after Musk's comments. As a matter of fact, Musk revealed on Twitter that the first stage of production at the site should be completed by the second half of 2019.

Producing cars in China should help Tesla fend off competition from domestic electric vehicle brands.

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