As the US and China resume fraught negotiations on trade issues, Tesla has begun building a new production facility for its electric cars in Shanghai.
The Californian electric car manufacturer had asked U.S. President Donald Trump not to apply a special duty of 25% to its Chinese made onboard computer for the company’s new Model 3. Mr. Trump responded by imposing tariffs on Chinese goods, prompting Beijing to slap counter duties on U.S. imports.
Tesla announced the start of construction of a new GW-scale plant in Shanghai in the middle of last year and secured land for it in the fall. The factory is the first outside the United States for the carmaker. On Monday, the foundation stone for the new production plant was laid in the presence of Tesla CEO Elon Musk and Shanghai Mayor Ying Yong.
Mr. Musk announced on Twitter that construction will be completed in the summer and production of the Model 3 should start by the end of the year. The vehicles made at the facility will be sold in China. In Shanghai, only the lower-priced models 3 and Y will be made, Musk went on to add. Higher priced models will continue to be produced in the U.S. – including those intended for the global market, said the CEO.
According to Bloomberg, Tesla’s new factory will cost around $5 billion. With a planning stage that stretched to four years behind it, the city government in Shanghai said the factory is the largest foreign investment ever made in its territory.