A local factory in the world's largest EV market is a high priority as the company attempts to expand Model 3 and Model Y distribution.Like many of Tesla's ambitions, the company's plan to build a factory in China is apparently on a fast track.Speaking during an Q3 analyst conference call, CEO Elon Musk said the factory has a "rough target" to start production in "about three years."
Establishing a factory in China aligns with an ambitious growth strategy for the Model 3 and the Model Y, a planned crossover that will be built on a new platform architecture with a focus on manufacturing simplicity and affordability.
Musk says a local factory is "really the only way to make cars affordable" in China. It will be on a scale similar to the Fremont headquarters, expected to churn out "at least" a couple hundred thousand vehicles annually.
"We're building complete cars and shipping them across the ocean into the largest electric vehicle market in the world," Tesla sales head Jonathan McNeill added. "So what really pulls us into China primarily is to be able to supply that market. And to make the cars more affordable, as Elon said, so we're not forcing consumers to experience tariffs if you bring those cars in. That's a much bigger impact than I think the supply chain or sourcing materials issue."
For now, the company is focused on resolving 'bottlenecks' that are still hindering production ramp up in Fremont. Targeted output of 5,000 units weekly has been pushed back to late Q1 2018.