Elon Musk and Tesla are wanting to open a brand-new Shanghai factory, however why China?
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Thanks Dave, great content as usual
Starlink delivers us an episode from the middle of nowhere!!
It smart to serve that region. Build the factories in the areas that the vehicles are being sold and delivered. As long as Shanghai isn’t the distribution center for the world then it’s not a problem. Plus they need a good relationship with the Chinese government to have access to all of the battery materials. Ultimately it’s about transitioning the world to renewable energy. Not just the United States.
Shanghai will service China AND be a large export hub.
If the objective to get off fossil fuels, this is the best way. Tesla has a huge backlog and China can build a factory in less than 1/2 the time. If they adds lines for existing models Tesla can meet demand sooner than bringing out a new car. It really is Tesla’s customers that determine their future.
FSD take rate in China is like 1%. So it makes so much more sense to make a cheaper car in Asia. In the US, it makes more sense to make a dedicated Robotaxi.
Just export them all out to areas where people are paying for fsd to skip the one year line.
Thanks for sharing your thoughts on this new factory. With the Shanghai factory being so successful, I have no worries. Tesla earn back the money for its investments in a new factory in a very short period of time. And with the current revenue each quarter, Tesla can easily build 2-4 new factories in the coming years.
I haven’t done the math on this. But it seems to me the old factory has already paid for itself. What did it cost to build and how much profit has been made from the vehicles out of that site? If I’m not mistaken, even if they completely lost all assets in China they’ve still made a profit.
same thought here too. Yes, the risk of CCP is always there but china workers efficiency, material supplies, logistic are unbeatable. I believe the benefit outweigh the negative. Worst case scenario is ccp confiscate tesla’s assets but that would a low possibility and would be way way down the road. For now, china want to rule the EV world market and they needed tesla as other high tech are pulling out of china. Lets see how xpeng, nio, byd perform. If domestic brands are not ramming up fast enough, china really really want tesla to succeed. Last report show BYD still not making money.
They earn probably 15k for every car sold. The produced around 500k-700k cars there?! Yea that factory has paid itself off in no time
@Andrew Cannon I *believe* BWD is making money but I don’t follow it closely. Also there’s a high probability that the CCP will limit Tesla’s dominance in favor of their own brands *for domestic sales* , naturally exports are more the better. I’d like to see the numbers on investment vs profits, that’s a good point to consider. CCP remains the biggest risk for Tesla but it’s a “must participate” in market.
@Andrew Cannon I am a shanghainese, and all i can say is our local goverment (Shanghai Municipal Government）has given Tesla a lot privileges, i think there are some policies made just for Tesla Shanghai Fectory to happen. Shanghai is the most captilist city in a commie country, its very very unlikely for ccp to confiscate Tesla’s assets, since Tesla is a great tax payer, if CCP decide to rob tesla, no other foreign Captial would ever invest in china again.The true risk is CCP’s ZERO COVID POLICY, you know we are under a lockdown, and the supply chain for many industries including automoblie have stopped
Hi Dave, nice video. I believe one of the real appeals to China is the one year build out to production. Another risk area I haven’t heard discussed on any of the channels out there, is the way the war is progressing in Ukraine and how the EU and euro market is talking about an oil embargo, I wouldn’t be a bit surprised that Russia shuts off the gas despite the lost revenue. I can’t help but think this would have a huge negative impact on giga Berlin. Your thoughts?
Great time for tesla to build 5 factories at once and give consumers a gas free alternative.
Thanks Dave good job delivering this news i completely missed it!
Makes perfect sense to expand their export hub and access to the leading global marketplace. With logistics near 100% local, this is fastest source of additional volume — and this expansion won’t be the last. To counter the risk of China politics (which seem to be only supportive at the moment), Tesla could establish next Asian factory and logistics network in India.
Nah, Tesla is planning to expand on existing footprints in Austin and Berlin. Tesla purchased huge acreage there for that reason.
Dave, thanks for the update. The housing market is in trouble in China. If it does collapse not sure how this will affect Tesla, Shanghai.
Exciting news for Tesla shareholders! I would love for them to expand more into China. The rate of development & manufacturing is SO much faster than elsewhere in the world.
Good Job for breaking news reaching us fast . Thanks Dave
Hi Dave, as always your videos’ are amazing. However, I would argue building a new factory in China introduce LESS risk for Tesla than building out in Austin or Berlin or anywhere else. Here is the positive side:
1. Permits and public sentiment is more positive in Shanghai than anywhere else.
2. It is feeding into the biggest marked globally
3. It is placed in the globally most robust supply infrastructure, especially for batteries, than anywhere else
4. It is placed where the workforce is more agile than anywhere
5. It is placed where the delivery and transport infrastructure with big ports are better than anywhere
I only see a political risk as significant but cant recall China ever shutting down export companies.
Exactly. The old Shanghai factory saved Tesla from bankruptcy. Its performance was so great that the tesla stock price soared right after the launch of the factory.
Meticulous analysis, as always. Thank you, Dave.
A new factory would start with the double-press frame, easing demand on the current factory, so that can switch to Giga2X,
Dave, Great insight into Tesla’s future production.
Wow, I didn’t know China ev market is that big. Thanks for opening my eyes. Good job Dave!
And Tesla has no choice but to expand in China given 90%+ of the processing of raw materials for making batteries are in China. It’s strategic of Tesla to double down on China, and yes, there’s geopolitical risk but until more battery RM processing happens in the US and elsewhere, China will remain a key hub for Tesla.
Another super video Dave always look forward to your content. Thank you x