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Tension between US and China makes Tesla give up building another factory in Shanghai

Even with the election of Joe Biden for the presidency of the United States, the tension between China and the American country remains stronger than ever. Proof of this is that some businesses remain undefined and companies that supported plans in Asia will need to review them. The newest side effect of this relationship between the most powerful nations in the world was a possible withdrawal by Tesla of making a new plant for its cars in Shanghai.

The automaker’s intention was to make the new plant in the Chinese metropolis its global export center, since the costs to manufacture the cars there are lower. Currently, the company’s other factory in operation in Shanghai already ships Model 3 cars throughout Europe, with an annual production of 450 thousand units per year, when added to the manufacture of Model Y.

The new factory in Shanghai – which was never confirmed by Tesla, that is to say – would have the capacity to produce an additional 300,000 cars annually, focusing on the company’s entry model, the Model 3. The 80-hectare site is next to the factory already existing and would give the automaker a huge production capacity, in addition to the logistical facility.

According to sources heard by Reuters, Tesla has given up on the acquisition of this land due to strong diplomatic clashes between the United States and China, which are in a particular war in several economic sectors, such as 5G, for example. In a statement sent to the news agency, Tesla said its Shanghai plant was “developing as planned”.

It is good to remember that Elon Musk’s company has a good relationship with China. For the reader to have an idea, the manufacturer is the only assembler present in the country that does not need to create a joint venture with another local company to make their cars and operate in the region, unlike other brands.

Today Tesla is building a new plant in Germany, which should be the source for a new compact and more affordable model, which would put the company in the fray with other automakers in the Old Continent.

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