The Tesla Factory Settles In China And Becomes Clearer. Power Battery Related Companies Will Receive More Orders.

- Sep 18, 2019-

At the regular press conference on October 26, the Ministry of Commerce spokesperson said: "With regard to the construction of the plant, Tesla is currently communicating with the relevant departments of the Shanghai Municipal Government."


According to industry insiders, Tesla's supply chain system is more open than traditional automakers, and many domestic companies have entered Tesla's supply chain system. If Tesla's domestic construction projects fall, its supply chain may shift more to the Chinese market, and industry chain related companies will get more orders.


Settled in China gradually clear


In response to the well-received topic of China, Tesla responded in an interview with Xinhua News Agency on October 24 that by the end of this year, the company's China localization plan will be clearer and is currently discussing with the Shanghai government. The possibility of a factory.


At the press conference of the Ministry of Commerce, Gao Feng said that we always hold a welcome attitude toward foreign investors investing in China, especially in the fields of high-tech, energy-saving and environmental protection, and strategic emerging industries. "We will greatly relax market access, expand opening up, and strive to create a business environment that is legalized, internationalized, and facilitated for foreign businesses."


According to industry insiders, if Tesla is established in Shanghai, it will become the first foreign-funded automobile company to establish a factory in China. Tesla will build a factory in the free trade zone and will enjoy many benefits in terms of trade and investment, while reducing manufacturing costs. However, sales in the Chinese market still have to pay a 25% import tariff.


Influenced by the news that Tesla will build a factory in China, on October 26th, the Tesla concept stocks were once again lifted up. Hongte Precision has a daily limit, and Weitang Industry, Tianqi Mould and Guangdong Hongtu are among the top gainers.


Supply chain companies will benefit


China has become the world's largest new energy vehicle production and marketing market. In the opinion of the industry, Tesla will reduce the cost of at least 20% after building a factory in China, thus directly reducing the terminal price of the product, which will have a greater stimulating effect on its sales in the Chinese market.


Tesla also said, "We need to set up overseas factories to ensure that more local consumers can afford our products."


From the current situation, Tesla's body assembly suppliers are mainly from North America, Japan, and Taiwan. In terms of battery systems, component systems, equipment, etc., domestic component suppliers such as Hongte Precision, Tianqi Mould, Haida Co., and Weitang Industrial entered the Tesla industrial chain.


Tianfeng Securities pointed out that if Tesla landed in China, it would benefit the local power battery supply chain. In 2018, Tesla will produce 500,000 vehicles, which will exceed 30GWh. The target output in 2020 is 1 million units, and the demand for power batteries will exceed 60GWh. If the global market share of the Chinese market reaches 40% by then (currently accounting for more than 15%), the demand for power batteries will exceed 20GWh, and the demand for power battery supply chain will usher in a substantial increase.