Tesla is planning to double the production capacity of Gigafactory Shanghai by building a new factory on the site that could add 450,000 vehicles to the Chinese plant’s yearly output. 

While we've heard of such plans before, this the first time Tesla has acknowledged them. In a May 1 letter sent to local authorities from Shanghai's Lingang Special Area, the EV maker mentioned plans to further expand its existing plant, confirming a previous report from February.

The company said it would build a new plant on nearby land in the same area, with an annual capacity of 450,000 cars when the first phase of construction is completed, including Model Y and Model 3 vehicles. As a result, Gigafactory Shanghai would become "the world's largest vehicle export hub."

Tesla previously said that the Shanghai plant delivered 484,100 vehicles throughout 2021, which means the new factory would effectively double the current facility's annual output. Giga Shanghai accounted for 51.7% of Tesla's 936,000 global deliveries last year, outpacing the busy Fremont Factory.

Gallery: Tesla Giga Shanghai (Tesla Gigafactory 3)

In China, Giga Shanghai delivered 321,000 Model 3 and Model Y vehicles to customers last year, 117% more than in 2020, with the remaining 163,130 cars being exported to major markets such as Germany and Japan.

While Tesla provided no timeline for the expansion, it's pretty clear that the automaker's capacity in Shanghai will grow to almost 1 million vehicles once completed.

In the letter seen by Reuters, Tesla also thanked officials for their support to enter "closed loop" production during last month's lockdown. The factory reopened on April 19 after a 22-day stoppage, the longest since the US automaker began production in Shanghai in late 2019.

Tesla's lost production for the period is estimated at more than 50,000 vehicles, according to calculations based on the company's output plans.

Production in Shanghai has reportedly rebooted to a pace of 80%, according to reports. During Tesla's Q1 2022 earnings call, CEO Elon Musk noted that the Chinese plant will still build as many cars in Q2 as it did in the first quarter of the year.

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