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Tesla to break ground on Shanghai Gigafactory; Elon Musk to do the honours

Tesla plans to produce its Model 3 and Model Y cars in the initial phase of production at the Shanghai plant

Reuters  |  Shanghai/Beijing 

Elon Musk
Elon Musk. Photo: Wikimedia Commons

Inc on Monday will break ground for its Gigafactory where it will begin making Model 3 electric vehicles (EV) by year-end, Chief Executive Elon Musk tweeted ahead of the formal start of construction of the firm's first

The $2 billion factory marks a major bet by as the US looks to bolster its presence in the world's biggest auto market where it faces rising competition from a swathe of domestic rivals and its sales have been hit by increased tariffs on US imports.

"Looking forward to breaking ground on the @Gigafactory today!" Musk wrote in a post on Twitter.

Tesla has been pushing forward its plans for the plant after it secured the site in October, hiring staff, starting procurement for building materials and setting up a financial leasing company in the city.

The so-called Gigafactory would also be China's first wholly foreign-owned car plant, a reflection of China's broader shift to open up its car market even amid a whipsawing trade war between and

Tesla plans to produce its Model 3 and Model Y cars in the initial phase of production at the plant, with an annual capacity of 250,000 vehicles.

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"Aiming to finish initial construction this summer, start Model 3 production end of year & reach high volume production next year," Musk wrote in a separate post on Twitter.

"Shanghai Giga production of Model 3/Y will serve greater region," Musk added in another one.

Tesla has said it aims to produce its Model 3 mass-market car from 2019 at the new plant. The Shanghai government said in a statement its mayor urged the firm to "accelerate" work on the factory and said production would start to some degree in the second half of 2019 during a land visit in December last year.

is the largest market for electric vehicles, and most forecasters predict EV sales in the country will accelerate rapidly as government regulation drives toward a goal of 100 percent electric vehicles by 2030.

First Published: Mon, January 07 2019. 10:25 IST