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Tesla breaks ground on its Gigafactory in China

Tesla breaks ground on its Gigafactory in China
[Photo: courtesy of Tesla]

Construction on the U.S. electric vehicle maker’s first Chinese factory has officially begun, reports Reuters. Located in Shanghai, the Gigafactory will localize production of affordable versions of the Tesla Model 3 and the Model Y for Chinese customers.

The Shanghai Gigafactory is significant not just because it’s Tesla’s first fully owned factory in China, but because it is the first wholly foreign-owned car plant of any overseas car manufacturer in China. Producing Teslas inside the country will allow Tesla to keep costs lower for Chinese customers by skirting the tariffs the Chinese government has placed on foreign-made cars thanks to Trump’s trade war.

Elon Musk says the company is aiming to have the construction of the $2 billion factory finished this summer with the initial production models rolling off the lines by the end of the year before volume production ramps up in 2020. “We think with the resources here we can build the Shanghai Gigafactory in record time and we’re looking forward to hopefully having some initial production of the Model 3 towards the end of this year and achieving volume production next year,” Musk said at the ground breaking ceremony.

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