Tesla Reported to Have Competing Bids For 2nd Gigafactory in China
We have reports that Tesla is having multiple bids for its second gigafactory in China. This would make for a total of 5 gigafactories if built and make the first time that two gigafactories are in one country. This is according to new documents released by a Chinese province.
The automaker says it expects to announce a new gigafactory location later this year. Could this be in China? And could it be later this year? Giga Berlin and Giga Texas, along with Giga Shanghai and Fremont, CA, will be producing cars this year. A second gigafactory in China could propel Tesla's annual vehicle production beyond 3 million.
Tesla has big ambitions for its yearly deliveries. Elon Musk wants to have 20 million annual deliveries. During Tesla's last earnings call for Q4, 2021, Elon Musk said that 2022 is the year we will be looking at factory locations to see what makes the most sense - with a possible announcement by the end of 2022.
Another factory in Europe could also be possible - maybe in the U.K. The new information seems to support a possible second location in China. As multiple provinces and municipalities compete against each other for Tesla to come to their location and build their gigafactory, Tesla could be swayed if the conditions were right.
The official China reports goes like so:
On February 11, Liaoning Province’s official Wechat account, "Liaoning Release," published an article titled "Five Grasps of Dadong District of Shenyang City, Striving to be the Pioneer in Revitalization Development." The report stated that Shenyang City is actively preparing to implement Tesla’s vehicle project.
Nothing is a done deal of course - the statement could point to something more aspirational as the government is hoping for Tesla to build a second gigafactory in China. It makes sense to build a second Gigafactory in China, given its huge size. In time, hopefully Tesla can also build multiple gigafactories in India.
Tesla could build a second gigafactory in Hong Kong to have another sea port open to export if needed, or they could build in a province like Chengdu, that is on the opposite side of China to the west and would allow land export to countries around China, as well as additional deliveries in China.
If the United States can have two gigafactories, Fremont, and Giga Texas, then why not China. In fact, I could see China having 4 gigafactories ultimately. As Tesla looks for a second location for a gigafactory in China, it is likely looking for less restrictions rather than financial incentives.
This is because Tesla is very cash flow rich and will only continue to become more so in the future. Given Giga Shanghai's success, it makes sense to take what is being done there and replicate it again in China.
I'm looking forward to seeing what, if anything, Tesla announces later this year.
Will Tesla build a second gigafactory in China? Will it be announced later this year, in 2022?
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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.