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Tesla To Start Building New Model 2 Factory In Shanghai After Chinese Government Approval

Tesla has gotten approval to expand and add a new plant to the Shanghai gigafactory. The new plant will be producing a China designed new vehicle expected to be the Model 2.

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Tesla has gotten approval from the Shanghai government to add manufacturing capacity to current plants producing the Model 3/Y and build an adjacent plant to manufacture a whole new China designed vehicle. The regulatory hurdle Tesla cleared is an initial environmental impact assessment.

In the filing, Tesla divides the project into phases 1 and 2. For phase 1 Tesla is trying to increase the production capacity of vehicles already being built in Giga Shanghai. In addition, Tesla is also planning to start manufacturing parts associated with the drive unit like the motors and also assembling the seats in Giga Shanghai. These parts for the Model 3 and Y have been getting built in the US and delivered to Giga Shanghai.

As Tesla increases its manufacturing capacity in Shanghai, building more components of the vehicles in the same plant was expect. But what is not expected or at least has come sooner than expected is, Tesla’s filing to build a plant for a new vehicle designed in China.

Related news: New Model S & X Interior Blueprint - Elon Musk And Tesla’s Elegant First Principles Ethos

Since the new vehicle Tesla is trying to build is under development, Tesla has said it will use some portion of the current plant for new the model’s early start-up related test and research work. These tests include the test of important equipment and production processes, and product size verification, matching of parts and functions.

Tesla Model 3

The test cycle of the project is about 6 months. And after the construction of the new plat, production will begin. We have some information about what the new vehicle will be. Elon Musk in the past has alluded to a 25,000 dollars compact car to be designed manufactured in China.

Tesla China in its official Weibo account released a rendering of a small vehicle to be designed in China. The vehicle resembles the model 3 from the front but has a hatchback and seems much smaller.

Elon Musk while presenting Tesla’s Battery Day event has said the new 25,000 vehicles (unofficially called the Model 2 among Tesla enthusiasts) will be the primary vehicle for autonomous ride-hailing purposes.

Other information we got on the event, the vehicle will have lithium-iron-phosphate (LFP) batteries. Tesla currently uses LFP batteries it sourced from CATL to power its China-made Model 3s. LFP when compared to nickel and nickel-manganese batteries has less energy density.

However, iron, unlike nickel has ample worldwide supply. This will ensure, what will probably be Tesla’s highest volume selling the vehicle will not face battery shortages caused by the raw material shortage.

The Model 2 is expected to have around 300 miles range. And be able to carry 4 adults. And will probably be the smallest and cheapest vehicle Tesla will be designing for a while.

So what do you think? Are you excited about Tesla’s 25,000 dollar vehicle? How soon after starting the plant do you think will Tesla start deliveries of the vehicle? Let me know your thoughts down in the comments below.

For more information check out: Elon Musk Interview With Sandy Munro - New Li-ion 12v Battery In The Model S & X And More Also, see Updated Tesla Semi Seen Without Wraparound Windshield - One Cause Of Nikola Patent Lawsuit

Tinsae Aregay has been following Tesla and The evolution of the EV space on a daily basis for several years. He covers everything about Tesla from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at
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tim (not verified)    March 8, 2021 - 4:32PM

The strategic thinking and planning of the 'model 2' of China design and make, has much sound thinking behind it. First, it allows China and it's gov't to feel 'well regarded' to do this with Tesla's lead. Second, it would be a '2nd world' export vehicle thus feeding the aims of China to dominate, as Japan did decades ago, the low to mid global car export market. As well, it afford extending the financial return on an older battery design-manufacturing platform for up to 15 years. This allows, over time, for this vehicle to 'move up' to the next line of batteries of the last mass production generation to again extend profit-result, improve the model's appeal to sustain sales for another 5+ years (so 20 years max est.), and shelter the top of the line newest battery tech from China's gov't aims for a few more years.

If Tesla has learned anythng recently from China sales, it's the undercharriage and suspension that 'must be very robust like a truck' to survive many areas and habits of Chinese drivers; thus affording it a 'wiser suspension design' for the Model 2, for the wild-roads of 2nd and 3rd world markets.

All these are positives. The chief concern, entering mid 2022, will b when new construction at Giga Shanghai is ended, the Model 2 moves to ramp up...but... the Giga berlin starts with the newest bateries and Cybertruck in Texas as well.

China's authorities are like spoiled N.K. leaders... and I estimate the honeymoon will end by 2023-24, leading to new very tough challenges for Tesla, Musk which he is ill-prepared to address as he's not asked a 'proven american manufacturing operations officer's' in-china expertise.

The saving grace through 2025 will be the exporting of the Model 2, and new cost cuts to the Y with some 'minor concessions' to soften the demands of the CCP when the new cells are in-market mass production for EU and US made vehicles.

I would strongly caution to 'start delivering profits from China operations' in-mass, quietly, from China back to Tesla US from end of 2021 on... so as to recoup both initial investments, debt in China security...and so on.

China's CCP has a heritage generations habit of 'total takeover of total control' of business operations of people of other races; and this will 'crop up it's ugly head' by 2023-25 timeframe. The people of China are wonderful and incredible, but the party has it's training-habits and policy racial selfishness; and this will be a press on Tesla 'value' leading into 2025.

The premise of Tesla 'fighting off' EU and old-Detroit competition, and maintaining a 5% growth year on year above 1.5M vehicles by 2023 and beyond.. will be key to Tesla growth survival, or it becoming another E-oil pupit company of low quality made-to-degrade Detroit style design and manufacture, leading to it being sold off and canabolized by those who feel 'a car should only hold value for 3-4 years'; thus the Detroit-Petro partnerships that led to the US making ill-entineered vehicles and losing national market share from 1978 through the last 10 years.

For Musk, I advise he consider all these, and start surrounding himself with people who 'know by experience' and can deal, project correctly, and prevent such issues.... and, to not lose interest in the 'thrival of the Tesla vehicle segment'.

Handing over, even a 1M mile battery car to the big 8 makers of global cars, will simply result in the vehicles being re-engineered to fall apart in under 5 years, losing safety, sustainability and global economic-eco-manufacturing vision if Tesla were either sold off, or handed the lead to the same 'stupid' leaders of Detroit and those in Japan who 'followed the lead' to make poorer cars that would not last, overall, and could not sustain our world

In fact, I would suggest to you Mr. Musk, if you read this.. that you consider my model for a 'car-turnin-refresh' approach to mass marketing sustainable resource transportation sales and theory.

Even so, the car segment should not be 'untrusted to companies and men', esp. detroit, who long to retain 300M salaries for executives who rob our environment, our global peoples with intentional poor design, engineered to fail transportation.

As well, I would rather see Tesla 'become #1 in global sales of private vehicles', and see Crysler ceace, and GM / Ford shrink notably in market-share, as well as Toyota, Nissan, Honda, etc.

Ask me Sir, and you will have a 'full cycle sustainable vehicle business' which allows buyers to 'revamp-trade to the maker' thus rotating platforms into refreshes every 7-10 years max, and end the energy-waste, material-waste, financial-waste, of our 'buy it, then trash it' mentality that is not sustainable for vehicles, appliances, or our current Mega-Trillion food packaging trash toxic industry today.

I wish you well, but you really need to 'open all inclusive a bit more' to men, like me, who 'been there, know so'.... for Tesla, and its future as a 'honogeniousous HOme, Power, Appliance, Vehicle and Community Sustainabilty' group of divisions inter-connected for a better world, and better quality health living for families globally.

And... respectfully, yes, I would want my name on my theory, to practice, and the businesses for which bear sustainable results that come from. I side with Mr. Tesla, but I won't be signing off on my best to some Westinghouse-like fatcat who'll drive the original vision into the same 'waste for fast profit' mentality that they did when they gained Tesla's best. can have, if you are single minded, whole hearted to ask me, and support me to make these things 'life health improving in a total-sustained new economic lifestyle' for us all.