Tesla’s planned China factory is expected to focus on making Model 3 and Model Y cars.
Tesla is setting a « rough target » of producing cars in China in about three years, said CEO Elon Musk.
Musk told analysts Wednesday that Tesla’s planned factory in China will likely focus on making Model 3 sedans and Tesla’s planned crossover vehicle, Model Y, for China and for some surrounding countries, Musk said. Manufacturing Tesla’s lower-priced models close to their markets will ensure their affordability, Tesla said.
The company plans to make a « couple hundred thousand cars per year » in China, Tesla said.
Tesla said it will not be spending major capital in the region until 2019.
The news comes days after the Wall Street Journal reported that Tesla had struck a deal to build a factory in Shanghai.
Musk delivered the details on the plans on a conference call following the release of Tesla’s third-quarter results, which were worse than analysts expected .
While the company plans to expand its international presence, analysts have expressed concerns over production delays with Tesla’s Model 3 sedan, and over amount of money Tesla is having to spend to grow its businesses in autos and renewable energy.
« Tesla is learning what traditional automakers have long known – mass vehicle assembly is complicated and expensive, » said Michelle Krebs, senior analyst at Autotrader. « A continued delay in Model 3 production and bigger losses were not the news hoped for with Tesla’s earnings report. »
Shares of Tesla were down about 5 percent in extended hours trading.
