Tesla Model 3 mass production in Giga 3 to benefit from China’s policy update for foreign carmakers

A recent policy update from the Chinese government could open the doors for Tesla to begin the mass production of the Model 3 in Gigafactory 3 sooner than expected. 

Recent reports from local news agencies have revealed that on July 9, the China Quality Certification Center, together with the Shanghai Market Inspection Bureau and the Shanghai Pilot Free Trade Zone Management Committee, jointly signed a memorandum that would allow automakers operating in the Shanghai Free Trade Zone to start the mass production of vehicles while the compulsory product certification (3C certification) process is ongoing. 

The 3C certification process is one of the Chinese government’s product conformity assessment systems. Regulations established in May 2003 demanded that all automotive products produced in China must meet 3C certification requirements before being mass-produced. Products that fail the 3C certification would be prohibited from being produced or sold, according to Caijing News. 

Under the terms of the newly signed memorandum, automakers, provided that they are operating from the Shanghai Free Trade Zone, could start vehicle production even as the cars undergo the 3C certification process. What is quite interesting is that there is only one automaker that is currently at the Shanghai Free Trade Zone operating a solely-owned facility — the Silicon Valley electric car maker, Tesla. 

While the updated policy from the Chinese government could benefit any automaker that chooses to operate from the Shanghai Free Trade Zone, the fact that Tesla is the only company today that can take advantage of the recently-signed joint memorandum further emphasizes the support that the electric car maker is receiving from the Chinese government. 

Tesla has already received what appears to be favors from the local government in China, as shown in the company curiously becoming the sole bidder for the Gigafactory 3 site, as well as the rather painless way the electric car maker was able to secure loans for the construction of the massive facility. In this sense, the updated policy that would allow Tesla to start Model 3 production despite the electric sedan undergoing 3C certification could be considered as China’s latest act of support for the electric car maker. 

It should be noted that this is the first time that the Chinese government is showing this level of support for a foreign automaker operating in the country. Prior to Tesla, China has been incredibly strict with the 3C certification process, requiring carmakers to produce sample vehicles that would usually end up undergoing a lengthy certification process. Tesla will not be meeting any of these delays. 

Tesla CEO Elon Musk has noted that Gigafactory 3 could start producing the Model 3 in Gigafactory 3 by the end of this year. Local reports from China itself have suggested that Musk’s target could actually be conservative, as initial Model 3 production could begin as early as September, barring any unexpected delays. 

Just recently, Ma Chunlei, director of the Shanghai Municipal Development and Reform Commission, expressed his optimism for the start of Gigafactory 3’s operations. “I believe that at the end of this year and early next year, you may see or buy the Tesla Model 3 produced in Shanghai, China,” he said. Once Gigafactory 3 hits its stride in producing the electric sedan, the facility is expected to ramp its production to around 3,000 vehicles per week.