Tesla Said to Mass Produce New Model 3 in China, Backed by Restarted Battery Plant

BEIJING, August 24 (TiPost)— Tesla is going to roll out new affordable vehicle model in China next month as the U.S. electric vehile (EV) giant intensified price promotion there.

Credit：Visual China

Tesla will started intensive delivery of its new Model 3 version by the end of September, and planned to resume production at Gigafactory Shanghai’s Phase 1 battery plant that month to meet the delivery timetable, 36Kr learned from several people with knowledge of the matter. Tesla China has comprehensively upgraded appearance and interior of the new model, and may remove all radars, the Chinese news media outlet reported. From the appearance, the model is reported to have a smoother body design, equipped with a brand new front bumper and streaming media rearview mirrors, multi-spoke aluminum alloy wheels. Its interior was said to change to a more concise design, such as to move the turn signal control to the steering wheel, and to add the gear shift control to the central control screen. The model was reportedly to feature Hardware 3.5 Full Self-Driving (FSD), instead of Hardware 4.0, Tesla’s latest suite of self-driving sensors and a new FSD computer.

Tesla China was reported in June to lay off workers that were assigned to Gigafactory Shanghai’s Phase 1 battery production line without clear reason. Reports later said the company gave affected staff options to transfer to different a different workshop in the complex. “Some of workers are gradually returning to the production line at the moment, while some of others are not back. It is not clear how much workforce that will eventually be brought back,” 36Kr’s source said recently. The report suggested restart of Phase 1 resulted from forthcoming demand for the new model. “Now demand is up, so Phase 1 is ready to reopen again,” a source noted.

Another source revealed the temporary shutdown of the Phase 1 was due to its low automation since it is the first plant that completed construction. 36Kr reported Giga Shanghai has three battery facilities–Phase 1, the smallest and oldest, Phase 2, a main battery facility, and Phase 2.2, the newest one built over half a year ago. Weekly production capacity of Phase 1 battery plant is about 3,000 to 4,000 battery packs, while Phase 2 and Phase 2.2 can each churn 10,000 packs per week, according to the report. Three facilities can reportedly supply nearly 100,000 units per week at full capacity.

Launch of the new model came as Tesla reignited price war in China, its most important overseas market. Tesla lowered price by up to 13% in China on January 6, making the starting price of Model Y and Model 3 down to new low and about 43% and 30% cheaper than those on sale in U.S. Tesla China surprisingly raised prices twice in four days in May after CEO Elon Musk signaled more cuts to come at the earnings call in April. But Musk suggested last month that his company more price cuts despite the earnings in the second quarter severely dented by major price cuts.

Tesla announced last week that it has reduced the starting prices for certain Model Y long-range and performance versions by RMB14,000 (US$1,935), or down 4.5% and 3.8%, in China. Following the cuts that day, two versions now cost as low as RMB299,900 and RMB349,900, respectively. While prices of the affordable Model 3 didn’t change, Tesla said it would offer insurance subsidies of RMB8,000 from August 14 to September 30 for purchases of the entry-level, rear-wheel-drive versions of the Model 3 vehicles in inventory.

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