US EV giant Tesla has plans to invest as much as $188 million in its Shanghai factory in order to upgrade equipment as the factory is getting closer to exhausting its current capacity by the end of this year, Bloomberg reported, citing sources. The installed annual production capacity of the factory is 450,000 vehicles.
As per a document on the Shanghai government’s platform for companies’ environmental information disclosure, the EV giant plans to invest in optimizing production lines at the China factory, which broke ground in 2019. The upgrade will take place within the factory’s current production area, and the new technology will remain compatible with existing models that are produced including the Model 3 sedan and Model Y SUV.
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However, a representative for Tesla in China told Bloomberg that the investment is not directly related to the expansion of production capacity but is targeted at upgrading key equipment and improving technology.
As a part of the upgrade plan, Tesla will hire an additional 4,000 production staff, taking the total number of employees at the factory to about 19,000. Apart from this, the upgradation of production lines at the factory may increase the plant’s output volumes by at least 10%.
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Tesla shipped around 350,000 vehicles from its Shanghai facility through the first 10 months of this year, as per data compiled by China’s Passenger Car Association show. This figure was achieved despite the coronavirus pandemic and a global chip shortage that kept pressure on production capacity.
The monthly shipment rate of the EV maker exceeded 50,000 units in September and October, resulting in the company hitting the annual production capacity level. China is one of the key markets to Tesla’s global ambitions.
(with inputs from Bloomberg)