2020年CRI What's next for planned Tesla Gigafactory in China?

 

Debate is now underway in China, as to where in the country Tesla intends to open its new manufacturing facility later on this year.

Observers are suggesting the company is now being faced with a number of new factors to consider.

Tesla CEO Elon Musk¹ said the company would announce the location for its Gigafactory in China later this year. The factory would become a new manufacturing base for Tesla's two mass-market electric cars, the Model Y and the Model 3.

Tesla currently exports cars to China from its plant in Fremont, California. The company accounts for around 9 percent of sales in China's booming electric vehicle market. Despite the popularity of the brand, for many young people, the high prices of the cars put them out of reach.

"For young adults like me, a Tesla is way too expansive," said one young man in Shanghai. "If Tesla can bring down the price, with its reputation, I do see it becoming more competitive," commented another. 

In China, domestic brands are in the driver's seat, with BYD and BAIC Motor occupying the top two spots in the electric vehicle market. Jiang Jun, General Manager at EVBUY, said that an overseas brand like Tesla might not be the first choice for the average Chinese consumer.

"For most customers, electric cars are something that is brand new to them. Many buyers don't have an adequate understanding of electric cars. Most of them would choose a local brand for their first purchase. Maintenance requests are usually responded to more quickly," said Jiang. 

Tesla sells 800 to 1,000 units a month on average in China, and its vehicles are subject to a 25 percent import tariff². By starting local production, Tesla can potentially lower its prices, as well as raise its profits.

But in April, President Xi Jinping vowed³ to lower import tariffs⁴ on cars, and lift limits on ownership for foreign automakers who want to manufacture vehicles in China. Dr. Xu Yun, a researcher at Shanghai's Academy of Social Sciences, says the company will have to consider this change carefully.

"I think Tesla will have to think twice and do their math again. If the Tesla Gigafactory is built in Shanghai's Free Trade Zone with a tariff exemption⁵, they'll have to calculate the production capacity and the land price. It could be very costly⁶ and lots of work to negotiate with the Shanghai government. So there are a lot of cost factors to consider. If the import tariffs are lowered, given the high cost of building the plant, whether they keep importing or build a plant is something Tesla will need to do more work on to evaluate," said Xu. 

Dr. Xu said that Tesla's expansion into the Chinese market could be beneficial for the country, as it could increase competition with domestic brands, and provide a boost to the development of China's electric vehicle market.

China's Association of Automobile⁷ Manufacturers predicts that sales of fuel cell hybrid⁸ and battery powered vehicles could top 1 million units in 2018. China would then account for around half of the world's market in electric vehicles.

1 musk   

n.麝香, 能发出麝香的各种各样的植物，香猫

参考例句：

• Musk is used for perfume and stimulant.麝香可以用作香料和兴奋剂。
• She scented her clothes with musk.她用麝香使衣服充满了香味。

2 tariff   

n.关税，税率；(旅馆、饭店等)价目表，收费表

参考例句：

• There is a very high tariff on jewelry.宝石类的关税率很高。
• The government is going to lower the tariff on importing cars.政府打算降低进口汽车的关税。

3 vowed   

起誓，发誓（vow的过去式与过去分词形式）

参考例句：

• He vowed quite solemnly that he would carry out his promise. 他非常庄严地发誓要实现他的诺言。
• I vowed to do more of the cooking myself. 我发誓自己要多动手做饭。

4 tariffs   

关税制度； 关税( tariff的名词复数 )； 关税表； （旅馆或饭店等的）收费表； 量刑标准

参考例句：

• British industry was sheltered from foreign competition by protective tariffs. 保护性关税使英国工业免受国际竞争影响。
• The new tariffs have put a stranglehold on trade. 新的关税制对开展贸易极为不利。

5 exemption   

n.豁免，免税额，免除

参考例句：

• You may be able to apply for exemption from local taxes.你可能符合资格申请免除地方税。
• These goods are subject to exemption from tax.这些货物可以免税。

6 costly   

adj.昂贵的，价值高的，豪华的

参考例句：

• It must be very costly to keep up a house like this.维修这么一幢房子一定很昂贵。
• This dictionary is very useful,only it is a bit costly.这本词典很有用，左不过贵了些。

7 automobile   

n.汽车，机动车

参考例句：

• He is repairing the brake lever of an automobile.他正在修理汽车的刹车杆。
• The automobile slowed down to go around the curves in the road.汽车在路上转弯时放慢了速度。

8 hybrid   

n.(动，植）杂种，混合物

参考例句：

• That is a hybrid perpetual rose.那是一株杂交的四季开花的蔷薇。
• The hybrid was tall,handsome,and intelligent.那混血儿高大、英俊、又聪明。