Tesla to Scale Up Production of Car Parts in Shanghai Plant

Leading electric car maker Tesla Inc. (TSLA) has expressed its intention of leveling up production of some car parts at its Shanghai based gigafactory. According to the company this move will also complement its push to localize its entire supply chain in China.

Tesla began producing Model 3 electric sedans at its Shanghai factory last December.

The company presented documents to the Chinese government indicating it wants to start producing electric motors and monitor controllers at the Shanghai gigafactory. In addition the firm also wants to scale up production of battery packs at the same plant.

In late December the company gave out a statement indicating all cars it produced in China used 70% of imported parts. It is this scenario the company wants to change by pushing for many car parts to be produced in China.

According to the documents Tesla is also planning to increase its annual building capacity for cooling pipes to double the buildings they have at the moment. Cooling pipes always play an essential role when it comes to the heat management system of a car.

During its annual reporting last year Tesla said it’s aiming at localizing its whole supply chain in China by the end of 2020. Nonetheless citing the new documents the company says it will only be outsourcing battery cells at the Shanghai gigafactory.

Production activities at the gigafactory have been greatly affected by coronavirus outbreak which has pushed sales of passenger cars to decline by a significant 80% in the month of February only. This scenario is expected to worsen if the coronavirus situation persists.

Tesla says its Shanghai gigafactory plays a very vital role in its global growth, the company expects to produce 150,000 Model 3 sedans at the factory and scale up the production to 250,000 before the year ends.