China Passenger Car Association has recently announced national vehicle sales data for the first month of 2022. The figures show that Tesla made "a flying start" to the year, delivering 59,845 vehicles in China in January. It is worth noting that Tesla exported 40,500 vehicles during the month, accounting for nearly 80% of China's total new energy vehicle exports in January, highlighting the strategic position of the Shanghai Gigafactory as Tesla's main export hub.

Tesla Shanghai Gigafactory, which was only put into operation two years ago, has become Tesla's main export center. It has helped Tesla to win continuous orders from Europe, Asia and other regions.

In Europe, EU-EVs statistics show that Tesla registered 24,911 Model 3 in France in 2021, making the Model 3 the most sold model in the European EV market. In 2021, the Tesla Model 3 also became the best-selling electric vehicle in Germany, with 35,262 registrations.

Why can Tesla Shanghai Gigafactory single-handedly support the market demand in Europe and Asia? The secret lies in the strong manufacturing industry in China. Tesla Shanghai Gigafactory has now reached a localized auto parts production rate of over 90%. The Lingang New Area of the China (Shanghai) Pilot Free Trade Zone where the Tesla Gigafactory is located has built a secure, independent and controllable industrial ecosystem for new energy vehicles, covering automotive chips, automatic driving systems, automotive interiors, vehicle bodies, new materials, precision processing and so on. The cluster-based industry development brought by Tesla has not only increased job opportunities for individual workers, but also promoted the development of supporting industries in the area.

In 2021, the Lingang New Area in Shanghai achieved a total industrial output value of RMB255 billion, with new energy vehicles becoming the first local industry to pass the RMB100 billion threshold. Lingang is expected to see its intelligent new energy vehicle industry attain a size of RMB300 billion by 2025. This will make Lingang a globally influential hub of intelligent new energy vehicle manufacturing.

On a wider scale, the accelerating implementation of the integration strategy for the Yangtze River Delta Region has attracted numerous auto parts manufacturers to Suzhou, Ningbo, Nantong and other surrounding cities, thus forming a 4-hour supply zone for Tesla. Large-scale industrial clusters have taken shape in the Yangtze River Delta Region, injecting new vitality into the rapid development of the local economy.

In its 2021 financial statement, Tesla also gave emphatic affirmation to the remarkable contributions of its Shanghai Gigafactory, pointing out that “localized production has been vital for Tesla to reduce per vehicle cost and improve global supply stability" in the face of global supply chain interruptions, logistics and transportation problems, labor shortage and other manufacturing challenges.

 

Authors: Ju Hefei and Zai Fei, Shanghai Observer