Tesla Increases Registered Capital Big Time For Gigafactory 3 In China

Tesla

SEP 10 2018 BY MARK KANE 27

Tesla invests in Chinese subsidiary to build Gigafactory 3

The Chinese Tesla factory in Shanghai announced this summer soon should move to the execution phase, as on September 7 Tesla increased the registered capital of Tesla (Shanghai) Co., Ltd. from 100 million yuan ($16.6 million) to 4.67 billion yuan ($680 million).

That’s enough to start the work at the Tesla Gigafactory 3, which in total is expected to cost at least $2 billion. The facility will produce up to 500,000 cars (and battery packs) annually.

Tesla didn’t pick up a joint venture partner, so the hope is that China will not change its mind and let Tesla (and other foreign manufacturers) to produce and sell cars on its own. Thanks to this, Tesla will be able to completely control the entire production process without being subject to others, according to James Chao, IHS Asia Pacific Managing Director and Automotive Industry Analyst.

It’s anticipated that the Chinese Gigafactory will produce Tesla Model Y (an affordable electric SUV).

Source: finance.sina.com.cn

Categories: China, Tesla

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27 Comments on "Tesla Increases Registered Capital Big Time For Gigafactory 3 In China"

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MaartenV NL

Still waiting for a battery cell announcement. Will it be Panasonic, a Chinese player or a Tesla DIY project.

Doggydogworld

DIY would be near-suicidal. Which probably means it’s DIY, ha.

eject

vertical integration!!!!111

Mikael

With zero experience in cell manufacturing it is of course not going to be a DIY project. Panasonic or CATL would be the safe bet, with the big money on Panasonic.

Pushmi-Pullyu

Right. We’ve already seen news reports about Panasonic negotiating to be Tesla’s partner with the Chinese Gigafactory. If for some reason that doesn’t pan out (and It might not, since Panasonic is a Japanese company, and China is hostile to Japan), then it will be some other battery cell maker.

Tesla trying to go it alone without a major battery manufacturer as a partner would probably be a disaster. Even a small battery maker would likely not be smart; look at what happened with Nissan and its failed battery-making partnership with NEC.

Stanislav

Probably Panasonic

Mark.ca

Did i miss anything or China is still requiring a partnership with a Chinese company? I know there were talks about ditching that requirement but as far as i know it’s still on.

Nix

It could be that Panasonic might have to partner with a Chinese company, even if Tesla doesn’t. But I really have no firm information, so it is way to early to know.

It seems like a “known unknown”. Luckily building out battery manufacturing lines is much less complex than the assembly lines for the whole rest of the car, so they don’t need an answer right away.

Art Vandelay

Nice…

tftf

Doesn’t mean anything, just placeholder capital for niow.

I would like to see the conditions (jnterest rate) when Tesla actually raises the $ in China.

Ron M

I guess I thought registered capital $680 million that they have a line of credit from a Chinese bank of $680 million to start work on the GF3.

Pushmi-Pullyu

A serial Tesla basher like “tftf” saying this “doesn’t mean anything”… doesn’t mean anything. Or actually it does; it means that this has tftf worried about his short TSLA position, which means it’s a good thing for Tesla! 🙂

Rolando

It’s just the declared capital in the company registration – not paid in yet.
In China you need a quite high capital to get a license to produce electric vehicles nowadays after the market was swamped with dubious start ups. That’s why Tesla increased this registered capital and added the company purpose from some small ‘electric component’ producer to full blown EV company.

And even to annoy more with ‘bean counter’ stuff: the base equity capital can never be a credit line at a bank. So somehow Tesla has to ‘cough up’ this $680M equity and only the remainder to $2 billion for phase-1 can be financed with borrowed capital in form of bank loans or bonds.

Benz

I wonder how much land ground surface area there will be available for the construction of the Shanghai Gigafactory?

It should be much larger than the Gigafactory in Nevada.

It might even be 4 times bigger than the Gigafactory in Nevada.

Mr stup

I think eight times, wow, eight times

Pushmi-Pullyu

Eight times, 20 times… 220, 221, whatever it takes. 😉

G2

Why Benz?

Hauer

batteries, engines, cars, powerwall, powerbacks, why not even solar roofs?
just be careful to have enough space around. just in case.

Pushmi-Pullyu

Well, the Chinese Gigafactory is supposed to be both an auto assembly plant and a battery factory, so it may be reasonable to think it’s going to be bigger than Gigafactory 1 in Nevada. On the other hand, land in Nevada was quite cheap, so Tesla built out and built low. If there isn’t as much cheap land at the Chinese Gigafactory site, Tesla may build up more than out.

You’d certainly want an auto assembly plant to all be on the ground floor, but there’s no reason why making something as small as a 2170 battery cell can’t happen on an upper floor. In fact, Tesla was assembling battery packs on the 2nd floor of the Fremont assembly plant until they moved operations to Gigafactory 1.

Benz

The Gigafactory in Shanghai will be the first Gigafactory where they will be producing battery packs and EV’s.

At the Gigafactory in Nevada they don’t produce EV’s.

Therefore I was wondering what the difference in size would be.

Jopp

I think it will be 420 times bigger. Funding secured.

Rolando

Electrek has more info: phase 1 is for cars only 250k units per year cost approx $2b, phase-2 battery factory, phase-3 double production lines for cars to 500k units per year — final cost all China together approx $5 billion.

Andy

The article mentions it will most likely produce the Model Y, but I wonder if it will have mixed capacity, with both the 3 and the Y produced there. That reduces the number needing to be produced at the current factory, allowing space for local production of the Y there.

Perhaps it’ll depend on how many parts the 3 and the Y share?

Pushmi-Pullyu

I have no idea why this article would claim “It’s anticipated that the Chinese Gigafactory will produce Tesla Model Y (an affordable electric SUV).”

The Chinese Gigafactory will produce Tesla cars for the Chinese market, not just one model of Tesla car. It is perhaps odd that Tesla has not yet announced where the Model Y will be built, but most of those watching Tesla closely don’t think the purpose of the Chinese Gigafactory is to build the Model Y for export to the U.S. and/or Europe.

I think it’s more likely that either Gigafactory 1 will be expanded to produce the Model Y, or else a European Gigafactory will produce that car.

Andy

Agreed. Tesla have an plan to produce all vehicles in their local markets, but it may well be they have contingency plans for all eventualities depending on continued sales of the 3.

If sales plateau and/or it becomes clear that the entire capacity of the GF1 will not need to produce Model 3’s for the North American market (and lets face it, 500,000 $35k+ cars is more than the entire premium market in North America at the moment, so 500k Model 3 sales a year in just North America is not realistic) then they may continue on their local market production plan.

However, if it isn’t the case they may well have to rush out and start producing the Y elsewhere and continue to ship vehicles around the world, while they build extra factories/expand existing factories to meet demand.

Nix

I’m not sure I’ve ever seen any claim of 500K Model 3’s being made exclusively for the US market. Do you have a source on that?

What I have heard is 500K COMBINED Model S/X/3 sales globally. Only around 400K or less would be Model 3, as 100K+ would be S/X global sales.

Offloading Model 3/Y production to global factories over time would likely just free up Fremont to manufacture new product lines like Semi, Truck, Y, Roadster, etc, not actually reduce the number of vehicles built there.

Rolando

With all the trade barriers Trump is currently building around the USA, it’s rather unlikely that any car produced in China can enter the USA for a competitive price.
Also the EU versus USA trade-war especially about auto tariffs is just paused for the moment to give some time for ‘deal making’ , if no deal = US produced cars can not enter EU and vice versa.