The American company Tesla has abandoned plans to buy land to expand its Shanghai plant, Reuters reported, citing unnamed sources familiar with the situation. According to them, the main reasons for the decision lie in the political plane and are associated with the growing tensions between the United States and China.
Sources said that Tesla refrained from bidding on a plot of land across the street from Shanghai’s Gigafactory in March, as it has no plans to expand production of electric cars in the country. A site with an area of about 40 hectares (about half of the current territory of the plant) could provide an increase in production capacity from 450 to 650 or even 750 thousand electric cars annually.
Expansion of the plant would allow Tesla to export electric cars assembled in China to other countries, including the USA. In particular, they talked about Model 3, which are currently being sent to Europe, where another “Gigafabrika” is being built. However, after a 25 percent increase in Chinese electric vehicle import charges made exporting products unprofitable, Tesla decided to limit the factory’s role in its global production plan.
Earlier it was reported that the authorities of the People’s Republic of China saw a threat to national security in Tesla cars. Electric cars were suspected of espionage and were banned from entering the territory of military facilities, and officials were asked to change to other cars.
Despite pressure from authorities, Tesla sales in China are growing. In the first quarter of 2021, the American company earned $ 3 billion in the country: this is more than three times more than a year earlier, and accounts for about 30 percent of its total revenue.