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Tesla Gigafactory 3 Is Being Built At ‘Incredible Speed’

Tesla’s third Gigafactory, one that will provide it with a way around Chinese tariffs on U.S. goods, is being built “at an incredible speed,” writes Electrek’s Fred Lambert.

The Gigafactory 3 is located in Shanghai and it will be the first EV factory in China to be wholly owned by a foreign company. Getting it ready is crucial for Tesla as it seeks to expand into the world’s largest car market in general and the EV market in particular amid the continuing trade rout between Beijing and Washington. It is also Tesla’s first production facility outside the United States.

A wholly-owned production facility in the world’s top EV market will help the company compete on a more level playing field with a growing number of local EV manufacturers with an established presence. As a U.S.-made vehicle, Tesla’s cars in China have been subject to steep import tariffs, and sales have suffered from the U.S.-China trade war—a problem that the Shanghai factory will solve.

Tesla broke ground on the facility this January and at the rate construction is going as per drone video coverage, it may be completed before the end of the summer. By the end of the year, Tesla plans to roll out some 3,000 cars weekly at the facility. This compares with about 7,000 cars at the original Gigafactory in Fremont.

In other news, Tesla is on track to sell a record number of cars this quarter, shipping some thousand vehicles daily on average since the start of June. The rush is prompted by the fact that EV incentives will be scaled back at the end of the month: from US$3,750 in federal tax credit to US$1,875.

Yet while the electric vehicle credits are set to halve starting in July, lawmakers have proposed legislation to expand the credit called the Driving America Forward Act, which would grant each automaker $7,000 for another 400,000 autos sold. This could also affect sales negatively and prevent Tesla from beating its own car delivery record as buyers hold out for the bigger incentive if the legislation passes.

By Irina Slav for Oilprice.com

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