Elon Musk kicked off the construction of Tesla’s new $2 billion “Gigafactory” in China on Monday, which he says will be ready this summer.
A factory on Chinese soil may help Musk dodge tariffs imposed by China as part of Donald Trump’s trade war.
Tesla said in October it was accelerating construction because tariffs as high as 40% were making it uncompetitive in China.
Since then, a temporary truce has brought rates back to 15% — but that expires on March 1, and it is unclear where they will end up. A Chinese base would shelter Tesla against potential future tariff hikes.
The factory will only make the Model 3, while the Model S and X will be built in Tesla’s two US factories.
Elon Musk kicked off construction of his new Tesla Gigafactory in Shanghai, a project which could help him get around tariffs on cars which have recently been inflamed by Donald Trump’s trade war with China.
Musk gave a speech at the site of the planned $2 billion factory in the Lingang district of Shanghai at around 3:00 p.m. local time (2:00 a.m. ET) on Monday.
The new factory, first announced in July 2018, could be a remedy to problems operating in China, which Tesla said were partly down to Donald Trump’s trade war. Musk said the factory will be finished by the end of 2019.
In October, Tesla said tariffs imposed by China to counter those made by Trump “resulted in an import tariff rate of 40% on Tesla vehicles versus 15% for other imported cars in China.”
It additionally cited “headwinds we have been facing from the ongoing trade tensions between the US and China” as a problem.
Read more: US companies are using an ingenious method to game the system and avoid the worst of Trump’s trade war
Source:: Business Insider