China not India will house Tesla's second Gigafactory

China not India will house Tesla
Highlights

The Shanghai municipality is most likely to be the home for Tesla’s second Gigafactory.Tesla Motors is reported to have chosen China as the location for its Asian manufacturing plant over other popular choices like India and Thailand. While nothing has been officially confirmed yet, media reports suggest that a non-binding MoU has been signed between Tesla and Jinqiao Group.

The Shanghai municipality is most likely to be the home for Tesla’s second Gigafactory.Tesla Motors is reported to have chosen China as the location for its Asian manufacturing plant over other popular choices like India and Thailand. While nothing has been officially confirmed yet, media reports suggest that a non-binding MoU has been signed between Tesla and Jinqiao Group.

Jinqiao Group is a Shanghai government-owned industrial organization which is reported to be Tesla’s local partner.Unprecedented response for the Tesla Model 3 has prompted the automaker to expedite its production expansion.

However, Shanghai Jinqiao Export Processing Zone Development Co, said in a statement that its parent company hasn’t signed any document relating to a Tesla Motors factory in China. But according to a Bloomberg’s source, Suzhou and Hefei cities are competing with each other to get the Tesla project.

The Tesla-Jinqiao partnership is expected to invest a total of USD 9 billion (50% of it will come from the American EV maker) in the Chinese operations which are likely to include setting up nationwide dealership network, a possible second Gigafactory, superchargers and even an R&D centre.

The Chinese plant will give Tesla a price advantage to battle it out with luxury brands.Local manufacturing would help Tesla avoid the 25% import duty which in turn would help the brand compete more effectively with luxury brands like Mercedes, BMW, Audit, etc. The location of the facility in the municipality of Shanghai has a strategic advantage as it is a major auto hub with well equipped Port.

This article has first appeared in Rushlane.com

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