Elon Musk: Tesla’s Second Gigafactory to be Built in China
In mid-April, media reported that in a summit organized by the Chinese auto industry, a source disclosed that Tesla will establish a wholly-owned factory in China in 2018.
SEE ALSO: Tesla Sales Double in China, Exceeding $2B in 2017
Tesla released its Q1 earnings report on May 3, and in the subsequent earnings call, CEO Elon Musk said in response to an analyst’s question that Tesla will soon announce the battery factory in China.
Tesla further revealed that the details on the address of the second Gigafactory will be announced before Q4 of this year. In the future, the scope of the Gigafactory will also include automotive manufacturing.
It is no coincidence that Tesla plans to enter China’s new energy market. In mid-April, media reported that in a summit organized by the Chinese auto industry, a source disclosed that Tesla will establish a wholly-owned factory in China in 2018.
China forces foreign auto makers to set up 50-50 joint ventures with Chinese partners if they want to locally produce cars to avoid a 25% tariff. The source pointed out that “the plan to remove restrictions on foreign equity ratio in the auto indstury has been put into study. The news is expected to be announced before the second half of this year.” It is also reported that “the plan to remove joint venture restrictions will be released before Oct 1, the National Day of the People’s Republic of China, at the latest. This plan will include defined guidelines and specific adjustments as things must be settled before the end of the year,” the source stated.
The establishment of a Gigafactory in China is a good news for Tesla, but their sustained losses are not positive signs.
The financial report shows that Tesla’s revenue for the first quarter was $3.409 billion, which was higher than the $2.696 billion for the same period last year; their net loss was $785 million, which was larger than that of $372 million last year; Meanwhile, the net loss attributable to common shareholders was $710 million, an increase from the $330 million during the same period last year.