Tesla confirms GF3’s 3k/wk run-rate as it readies to meet China’s Model 3 demand

Tesla posted record vehicle production and deliveries in Q4 2019 with 104,891 units rolling out of the production line and 112,000 Model 3, S, and X being handed over to consumers before the end of the year. Likewise, the California-based electric car maker confirmed that it has demonstrated a run-rate capability of more than 3,000 vehicles a week at Gigafactory 3 in Shanghai.

As Tesla announced its Q4 2019 vehicle production and deliveries report, the company will be focusing on expanding its production in the United States and in China. Before the end of 2019, the electric car maker said that it has been producing 280 vehicles per 10-hour shift at Gigafactory 3, with plans to increase the production of Model 3s to 3,000 a week. Elon Musk has mentioned before that Gigafactory Shanghai might produce as many as 5,000 vehicles a week.

The plans of ramping up production are consistent with the company’s latest move of reducing the price of the Made-in-China Model 3 to $42,919 from around $50,000 before government subsidies. The price adjustment for the entry-level luxury electric sedan will undercut big brands such as BMW and Mercedes-Benz and lure more customers away from local manufacturers such as NIO and XPeng Motors. Overall, Tesla’s success in China can help CEO Elon Musk turn the electric car maker into a consistently profitable company.

The sudden price adjustment of the Made-in-China Model 3 has seemingly opened the floodgates. News out of China suggests that Tesla’s local staff are currently fully occupied dealing with a large volume of orders for the Model 3.

The latest developments follow earlier reports that Tesla sources around 30% of its Made-In-China Model 3 parts locally, and there are plans to completely shift parts-sourcing in China. If the latter happens, there is a possibility for more price adjustments in the future.

Likewise, Tesla has been receiving support from the Chinese government and it seems like the latter wants the former to succeed. The country’s Ministry of Information and Technology recently announced that the locally-made Model 3 is exempted from a 10% purchase tax.

Tesla handed over 15 MIC Model 3 units to its employees in China during a ceremony at Gigafactory 3 facility on Dec. 30. On Jan. 7, the electric car maker will deliver the next batch of Model 3s to the public, in an event that marks exactly a year after Gigafactory 3 broke ground.

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