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Tesla Gigafactory China: Mud, “Basically An Open Field,” Not Gonna Happen — Skeptical Claims Revisited
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Published on October 3rd, 2019 |
by Zachary Shahan
Tesla Gigafactory China: Mud, “Basically An Open Field,” Not Gonna Happen — Skeptical Claims Revisited
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October 3rd, 2019 by Zachary Shahan
We reported yesterday that Tesla was ending Model 3 Standard Range shipments from the US to China because it was starting to produce the base Model 3 trim in its new (and still under construction) Shanghai gigafactory, “Gigafactory 3.” It may surprise even Tesla optimists that the company was able to go from no construction at all to Model 3 production in such a rapid time, but it surely surprises Tesla skeptics the most. In fact, in light of the milestone, I thought I’d remind people of a handful of claims about Gigafactory 3 from just earlier in the year, a couple of quarters ago. Most of these were published within one month of Elon Musk joining a little ceremony for the Gigafactory 3 groundbreaking on January 7th, but note that skepticism about the factory has been common throughout the year.
In a January 7th article titled “Elon Musk Sees a Future in China for Tesla, and It’s Muddy,” the Bloomberg writer doesn’t say the plan is impossible or unrealistic, but he comes close, while writing about Elon Musk in an unflattering fashion throughout the article. If, at the end of the article, you got the impression that one should be skeptical of Tesla’s Gigafactory 3 plans and the future of Tesla, you would digested exactly the narrative he was pushing.
On January 14th, Forbes published an article titled “Not So Fast: Can Elon Musk Really Open Tesla’s China Gigafactory This Year?” The article, exuding an air of authoritative skepticism, started off like this: “Elon Musk rarely shies away from setting bold targets for Tesla, despite a mixed record for achieving them when promised. So it was in character when he announced the electric-car company’s first Chinese Gigafactory could be operational in about 11 months.
“‘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 Shanghai groundbreaking January 7.
“He may be disappointed.
“There’s no precedent for building a large, modern auto-assembly plant and starting its production in under a year, manufacturing experts say. In fact, even Tesla’s official goal of ramping up to 3,000 Model 3 electric sedans per week at some point in 2020 won’t be easy.
“‘Unless he’s mastered some approach that I’m not aware of to do everything in a more effective and efficient way, that lead time to build is going to be really challenging,’ said Laurie Harbour, CEO of manufacturing consultant Harbour Results Inc. in Southfield, Michigan. ‘It definitely seems completely optimistic.'”
Optimistic? Or realistic?
After claiming that Tesla was not known for meetings its production goals (note that Tesla is on track to nail Elon Musk’s 2014 forecast for 2020 production and delivery goals), Business Insider writer and frequent Tesla critic Linette Lopez expressed great skepticism about Elon Musk’s plan to have Tesla producing the Model 3 at its Shanghai gigafactory by the end of 2019. “So far, the China plant is, um, basically an open field with some digging going on,” she said. “It’s harder and harder to believe that there will be Model 3s coming out of the Tesla China gigafactory by the end of the year.”
A February 8th article on GuruFocus by the president of Almington Capital — Merchant Bankers, short Tesla [TSLA] at the time, was titled “Tesla’s Shanghai Plans Don’t Add Up.” The article contained paragraphs like these: “Tesla has been talking about China for a number of years, but not much material came of all that talk. Then, in October, the company announced it had leased a plot of land in Shanghai’s Lingang area. The swampy land had found little interest among potential domestic anchor developers, which goes some way to explaining the slightly below-market $140 million price Tesla agreed to pay. …
“When Musk broke ground at Gigafactory 3, the plot was still nothing but a field with a temporary wall erected around it (and a worryingly muddy field at that). Tesla had claimed to be ramping up construction efforts even before the official groundbreaking, but there was little sign of construction activity, despite the convenient presence of heavy construction machinery at the event.
“Since then, updates have been somewhat scant. Some intrepid observers, however, have provided independent status reports via aerial drones. The most recent video footage of the site was recorded and released on Feb. 5. It shows little in the way of progress. There appears to be some poured concrete, yet there is virtually no visible work activity or sign of life around the place. That is certainly inconsistent with Tesla’s own extremely aggressive timetable.”
To be fair, there’s still mud on the site. But I think you get the point.
Is Elon Musk a magic maker? Or are people just too skeptical? Or have they simply been pushing an agenda, for one biased reason or another, that we can now see was completely disconnected from Tesla’s future in the physical world?
If you’d like to buy a Tesla — whether you believe it exists or is simply elaborate vaporware — and also get 1,000 miles of free Supercharging, feel free to use my referral code: https://ts.la/zachary63404.
About the Author
Zachary Shahan Zach is tryin' to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director and chief editor. He's also the CEO of Important Media. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao.
Zach has long-term investments in Tesla [TSLA] — after years of covering solar and EVs, he simply has a lot of faith in this company and feels like it is a good cleantech company to invest in. But he offers no investment advice and does not recommend investing in Tesla or any other company.
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China Tesla Demand Is Spiking
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Published on October 3rd, 2019 |
by Guest Contributor
China Tesla Demand Is Spiking
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October 3rd, 2019 by Guest Contributor
Originally posted on X Auto and EVANNEX.
By Iqtidar Ali
Tesla Model 3 and Model X demand are skyrocketing in China, especially since the Chinese government gave a 10% car purchase tax exemption to Tesla last month — a sign of aggressive electric vehicle policy implementation by China.
A large number of Tesla Model 3, Model S, and Model X vehicles outside the Beijing Department of Motor Vehicles (Source: Jay In Shanghai)
There are several reports coming out of Beijing and Shanghai about massive amounts of deliveries happening via Chinese Tesla stores. As evidenced in the featured image above, Teslas have flooded Beijing’s Department of Motor Vehicles in order to obtain license plates. In addition, below is a short video from outside the Beijing DMV that shows a long line of Model 3s at the facility.
Meanwhile, Chao Zhou is consistently updating the Tesla community about Gigafactory 3 developments by reporting directly from the ground. Chao recently visited the Tesla Shanghai Jinqiao Store and the number of Model 3 sales he saw at the location was nothing short of astonishing.
According to Chao’s meeting with Tesla staff at the Jinqiao Store, a surge in Model 3 orders occurred post-tax exemption. Crunching the numbers, the Jinqiao Tesla Store alone is expected to accumulate 3,000 orders by the end of this month.
It’s quite conceivable that Tesla China will deliver these cars by the end of October, which should bolster Tesla’s Q4 delivery report.
In addition, large numbers of Model X vehicles also await delivery — proof of the popularity of Tesla’s SUV in China. It turns out even Elon Musk used a Model X convoy on his Shanghai visit recently.
China’s 10% tax exemption drops the purchase price of the Tesla’s electric cars by up to 99,000 yuan ($13,960), according to Reuters. Needless to say, this big discount is attracting a lot of attention from Chinese auto buyers searching for a reliable, premium electric car.
The Tesla China website states that the maximum tax break obtainable on a Model 3 is ¥52,000 ($7,345). This tax break can be realized on Model 3’s highest priced variant. For more details, Tesla’s website has a tax incentive info page covering the policy details of every Chinese region.
And it’s not just new Teslas in high demand. According to Quartz, “Nobody wants a used electric vehicle in China, unless it’s a Tesla.” It’s reported that, “A Tesla’s residual value—basically the future value of a car after a certain amount of use—at one year is more than 70% of its original price, far higher than the value of any Chinese EV model at the same mark.”
Tesla’s traction in China (YouTube: CNA)
Meanwhile, Tesla’s Gigafactory 3 buildout remains in “ludicrous” mode. The company’s Model 3 assembly lines are already in place and other parts of the huge complex are nearing completion.
According to Reuters, “Tesla Inc’s China factory aims to start production this month.” Furthermore, CleanTechnica reports, “Tesla will cut off orders of the Model 3 Standard Range after October 13th in anticipation of the start of production at Gigafactory 3 in Shanghai, China.”
To that end, in the coming months, Tesla China customers will be able to get their Model 3s delivered far quicker (in larger quantities) from Shanghai’s Gigafactory 3.
Featured image via Tesla
About the Author
Guest Contributor is many, many people. We publish a number of guest posts from experts in a large variety of fields. This is our contributor account for those special people. 😀
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The all-electric Polestar 2 has its sights set on the Long Range variants of the smaller Tesla sedan, and thanks to this week's announcement, we now know they'll be very similarly priced in Europe, where the Polestar 2 is now available for order.
The biggest divide in EU pricing is in Germany, where the Polestar 2 will start at 58,800 euros (vs. 54,800 euros for the Model 3 Long Range AWD); the gap in The Netherlands and Belgium is a bit smaller (around 1,000 euros). In the UK, Polestar's 49,900-British-pound price tag is 2,000 pounds dearer than the Tesla's.
Those prices equate to $64,600 in Germany and $61,000 in the UK. That's not far from what Polestar has said about U.S. pricing—that it will cost $63,000 for the first year’s Launch Edition of the model, which will be eligible for the full $7,500 federal plug-in tax credit.
Some time after that, a base version is expected to join the lineup at $43k to $45k, or about $45,400 (39,900 euros) in Europe—or be available by subscription—but both of those things are more than a year out.
Polestar 2
The Polestar 2 will boast more than 400 horsepower and do 0-60 mph in less than five seconds. Those specs fall short compared to the Tesla Model 3 Long Range AWD Performance, which offers more than 450 hp and accelerates to 60 mph in just 3.3 seconds.
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Polestar bundles three years of service and maintenance as part of its out-the-door pricing, which should provide peace of mind for early adopters. The launch markets for Polestar 2 will be Norway, Sweden, Germany, The Netherlands, Belgium and the UK. We won't see any versions of the Polestar 2 in the United States until late in 2020.
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