Tesla is reaching the limit of its current plant capacity at Shanghai, so it’s planning to invest up to ￥1.2 billion (A$263 million) in upgrading the plant.
As reported by Bloomberg, undisclosed sources familiar with the matter said Giga Shanghai is expected to reach the limit of its capacity in 2021.
According to a Chinese Environmental Impact Assessment (EIA) document, these upgrades will increase production capacity and line optimisation.
Tesla plans to hire an additional 4000 workers at its Shanghai plant as part of the upgrade, which will take the total number of workers to around 19,000 according to the EIA document.
An unnamed source told Bloomberg the production line upgrade along with the extra workers could increase ‘Giga Shanghai’s’ output volumes by at least 10 per cent.
Tesla broke ground in Shanghai in January 2019 and has an annual production capacity there of 450,000 vehicles according to the company’s 2020 annual report.
A representative from Tesla in China told Bloomberg the upgrade is targeted at upgrading key equipment and improving technology within the plant’s current production area.
This upgrade project is said to be carried out in two phases, ‘Phase 1’ and ‘Phase B’, according to a report from China News Network.
It’ll reportedly commence in December 2021 and be completed in April 2022 at the earliest.
The plant is already open 24 hours a day and running three shifts, with only a single day of maintenance every week or two, a source told Bloomberg.
Despite the semiconductor shortages, figures from China’s Passenger Car Association show Tesla shipped around 350,000 vehicles from its Shanghai plant in the first 10 months of 2021.
In the last quarter of 2021, Tesla’s CEO Elon Musk is reportedly focusing on minimising costs rather than overall production numbers according to an email shared on Drive Tesla Canada.
Elon wants his employees to “take the most efficient action, as though we were not publicly traded and the notion of ‘end of quarter didn’t exist’”.
Currently, Giga Shanghai produces and exports Tesla Model 3 electric sedans to Australia, along with other Asia-Pacific and European markets, and Model Y electric SUVs.
Australians are yet to see the Model Y Down Under with the local launch expected to take place sometime in 2022.
Should a production line upgrade be about to commence, this bodes well for Australian customers who are currently waiting around eight to 12 weeks for a Model 3.