BusinessTechnology

Tesla sets up a factory in China, loans $521 million from local banks

Tesla and Musk to focus on SpaceX

Tesla is one of the biggest Electric Vehicle companies in the world. The company which runs in losses had secured profits for five straight quarters not long ago. The company produced thousands of Tesla Model 3 cars in a week and were meeting the customer requirements. The technology used in Tesla cars is top notch. The company is second to none in this line of business and it is trying to be at the top. Tesla’s are not produced worldwide but only in America and that is the reason they are finding it hard to hit the breakeven point.

The company also has no intentions in expanding in Asia. The only country the American company serves in Asia is China and it is looking to get further into the Chinese market. China is the biggest market for cars in the entire world. The Asian country hits the top spot with ease and the numbers are just staggering. China has the largest population in the world and that asks for more and more cars. That is the reason for its humongous car market.

That said, Tesla had a lot to worry about when the trade war between the United States of America and China worsened. There were talks of cutting all ties and this could have put an end to Tesla and China’s ties. After realizing this, Tesla decided to invest in China. The American company has loaned over $521 million from four different banks in China. Elon Musk and Tesla decided to rely on the local banks instead of taking a loan from American banks instead.

Tesla is setting up a factory in China and is planning to produce more than 3000 Model 3s in a week. Although the company’s aim is to produce more than 500 thousand Tesla’s in a year. That might be achieved in China. This time around Elon Musk might pay attention to not over-automate the factory as he did back in the states.

That said, Tesla needs to be commended for its efforts as it is not easy for a foreign company in China. There were a lot of companies that left China because of the strict rules and what not. The companies that have gone to China had to face extreme competition from local players as well and that is the reason the companies had to bow out of there.

The reasons why Tesla will be successful there is because the company already has a fan base in the Asian country. The other reason would be increasing pollution in cities like Beijing. The pollution half a decade ago had reached the skies but electric vehicles and other measurements have got it under control. That said, EVs are and will be in demand for a long time. Tesla is on the right track and this investment is going to be converted into profits soon.

-Unmesh Phule

Comments (1)

  1. […] Tesla previously said it aimed to start production in Europe in 2021. The moves come as the firm, which has also invested heavily in a Chinese factory, faces intensifying competition in the electric vehicle industry. […]

Comment here