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Tesla speed: first China-made Model 3s delivered to employees, customer deliveries to start “soon”

UPDATE

Tesla lowered the pre-subsidy price of the China-made Model 3 (445-km Standard Range version) from ¥355,800 to ¥323,800 on January 3, which means after ¥24,750 in NEV subsidies it will only cost ¥299,050. Deliveries to customers will begin on January 7, exactly one year after construction began at Gigafactory Shanghai.

SHANGHAI – Tesla will begin deliveries of Model 3s produced at its Gigafactory in Shanghai to external customers “soon,” Tom Zhu, vice president of Tesla and head of its Greater China region told reporters as the U.S. electric carmaker marked a major milestone by delivering the first batch of 15 locally-produced Model 3s to employees on December 30.

“Very very soon,” said Zhu at an event celebrating the milestone at Gigafactory Shanghai, describing the occasion as “seeing his own kids go to college.”

The milestone comes just 357 days after Tesla broke ground for the factory on January 7 and just days ahead of official deliveries to customers are due to begin, well ahead of its previous plan to start deliveries before the Chinese New Year, which falls on January 25, 2020.

It also comes three days after the locally-produced Model 3 was listed in the latest batch of Catalogue of New Energy Vehicles Exempt from Vehicle Purchase Tax released by the Ministry of Industry and Information Technology (MIIT) and State Administration of Taxation, meaning that customers would save about ¥30,000 in purchase tax from the manufacturer suggested retail price (before subsidies) of ¥355,800 for the locally-produced Model 3, which is also entitled to an NEV subsidy of ¥24,750. After the savings, a customer ends up paying only around ¥300,000 for the locally-produced Model 3, currently offered with an NEDC range of 445 km. Another version with an NEDC range of 455 km will be added at a later date.

On December 27, Tesla also opened its first ever V3 supercharging station in Shanghai, offering owners the ability to charge their vehicles at a maximum charging power of 250 kW, more than twice that of existing V2 superchargers spread throughout the country. A 5-minute charge adds approximately 120 km of range back to the vehicle.

A day earlier, Tesla secured a loan up to ¥9 billion with several Chinese banks including China Construction Bank, Agricultural Bank of China, Shanghai Pudong Development Bank and Industrial and Commercial Bank of China to finance expenditures related to the construction of and production at the Shanghai Gigafactory or to repay certain outstanding debt of Tesla Shanghai.

Tesla completed the construction of Gigafactory Shanghai in record time, faster than expected and despite several typhoons and more than 40 consecutive days of rain, something that had not happened in 145 years. Tesla’s senior management required the China team to complete construction of the factory in just nine months while ensuring high quality of locally made cars, according to Song Gang, manufacturing director at Gigafactory Shanghai.

The first 15 locally-produced Model 3s were delivered to 15 outstanding employees voted internally by Tesla China, according to Tao Lin, global vice president of Tesla.

In addition to the Model 3, Gigafactory Shanghai will likely begin production of the Model Y next year, both of which will only be sold in China, with combined initial annual output capacity of 150,000 units.

The factory currently produces 28 Model 3s per hour via a single shift of about 10 hours a day, which equates to a weekly production rate of 1,000 cars, according to Song. That is expected to double to 2,000 cars a week next year when an additional shift is added. Currently the localization rate for the Model 3 has reached about 30 percent, to be increased to 70 percent by July 2020 and 100 percent by the end of 2020.

Tesla has reportedly sold about 39,000 vehicles in the first 11 months of 2019 in China, more than three times the volume during the same period in 2018. It recently opened the 300th supercharging station in China, bringing coverage to more than 140 cities with over 2,200 superchargers and 2,100 related destination chargers.

Wang Hao, president of Tesla China, told the media that Tesla is confident that it can reach its production and delivery targets for the locally-produced Model 3 in China in 2020. It also plans to speed up expansion of supercharging stations in China, at roughly five times the rate during the last five years, according to Wang.

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