Telsa Just Delivered Its First China-Built Cars In Shanghai

Electric-car maker, Telsa Inc. handed over the first 15 Model 3 sedans assembled at its new multibillion-dollar plant near Shanghai (its first outside the U.S.) to company employees at the facility on Monday (Dec. 30). 

Investors had a bet that this time will be different, with Tesla shares on a tear since the company reported a surprise quarterly profit in late October. The company said through its manufacturing director that the China plant is already assembling more than 1,000 cars a week, and aims to double that rate over the next year.

Some critics are in doubt despite the progress being made. An analyst at Cowen & Co., Jeffrey Osborne predicted recently that Tesla will fall short of the low end of its delivery forecast for this year. He predicts the company will hand over about 101,000 vehicles in the fourth quarter, coming roughly 4,000 units short of its annual target for at least 360,000. The stock is still up about 62% since the company reported third-quarter earnings on Oct. 23.

Osborne wrote in a statement, “The large amount of over-exuberance related to the demand for Tesla’s products in the mid to long term has increased over the past few months, and we believe much more successful penetration is baked into the stock than is likely to play out. While Tesla has built a very dedicated fan-base that has been willing to excuse poor build quality, customer service, and service infrastructure, we continue to be skeptical around broader adoption.”

A crowd of about 200 people, including media and employees, gathered inside the plant to clap and cheer as Tom Zhu, Tesla’s head of greater China, handed over the first cars. At the event, company officials said more workers will receive vehicles over the next couple of days, and deliveries to customers will start in January..

The Chinese plant represents a cornerstone of Musk’s plans to make Tesla a truly global carmaker. The company last month announced plans to build a factory in Germany to cater to burgeoning European demand for electric vehicles.

Demand for the locally built Model 3 is “very good,” and Tesla is confident it will sell all vehicles manufactured at the site, Allan Wang, general manager of Tesla China, said at the plant. “Our aim is to kill all internal-combustion engine cars.”

Tesla said in October the locally built Model 3 will be priced from about $50,000. On top of the tax exemption announced Friday, the China-built model this month qualified for a government subsidy of as much as about 25,000 Yuan ($3,600) per vehicle.

At the ceremony, Xue Juncheng, director of China after-sales said, "As part of its China expansion, Tesla plans to add dozens of locations in the country over the next year for showcasing its vehicles and providing charging and other services."

This report is coming after Investing Port recently reported that Telsa was getting a loan of $1.4 billion from China Banks to fund operations and other activities in its Shanghai factory.