Tesla Giga Shanghai Factory delayed due to Chinese government concerns expansion

China has become a key manufacturing center for Tesla, with the Shanghai plant producing 710,000 vehicles in 2022, accounting for about 52 percent of the company's global production. The expansion of the Giga Shanghai plant, which was scheduled to begin in mid-2023, has been delayed, according to the source.

The plant, which now has an annual capacity of 1 million vehicles, would double the plant's capacity to about 2 million vehicles per year if the expansion goes ahead as scheduled. The first phase of Tesla's Giga Shanghai plant breaks ground in 2019, the second phase was completed in 2022 with the upgrade construction.

And it was delayed because some top Chinese government officials, concerned that a U.S. company with ties to Elon Musk's Starlink, has such a large presence in Asia's largest economy.

While Tesla cars are not equipped with Starlink, Beijing is increasingly concerned about data security and social stability. in early 2021, Tesla cars were also banned from military bases and government administrations in China because they feared Tesla's Sentinel model would collect sensitive data. The issue has become increasingly sensitive at a time of heightened tensions between Washington and Beijing.

But the expansion is backed by local government officials in Shanghai, according to sources, and the matter is still subject to change and will await further guidance from senior Chinese government officials.

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John Murphy

John Murphy is the founder of TOPCARS Tesla Aftermarket Accessories, as well as an investor in Tesla and owner of the Model Y. He posts about Tesla news while running the site on a daily basis.

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