What’s the matter?

Tesla is committed to producing more cars in the world’s largest electric car market. It aims to produce one million cars a year in China by the end of the decade and to consolidate its presence in China as a premium brand and a leader in the high-rise EV segment. Thus, another plant with a capacity of about 500,000 units is needed.

Takeaway key

A the second Tesla car plant in China – in Shanghai or near it, where there is already a factory – it’s racing confidence. Assuming that Tesla’s production could reach about a million units in China in 2029, this would amount to about 2.8% of the projected total sales in the country of 33.6 million units this year. This would bring Tesla in line with Chinese sales figures of BMW and Mercedes – comparable premium competitors that are likely to be bought by potential Chinese Tesla customers.

As a result, according to GlobalData, Tesla’s target for production in the country seems quite sustainable.

Data points

Analyst’s comment

Mike Woodden, automotive analyst at GlobalData, comments:

“Tesla will prefer China because the country is both the largest market for new cars and the largest market for battery electric vehicles, so it offers more growth potential than traditional markets.

“By 2029, Tesla’s total production is projected to reach 2.56 million units – 900,000 from the US, 700,000 from Germany and 950,000 from China. That figure would again put it, in terms of volume, in a similar position to BMW and Mercedes, which both produce about 2.5 million units a year and can be considered direct competitors to Tesla.

“The expansion strategy for China is clearly central to Tesla’s growth, and it is still seen – especially by investors – as a sector leader.”

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