In a speech to the National Press Club in Canberra, Australia on Wednesday, Tesla Chair Robin Denholm explained why it would be ideal for the electric vehicle maker to expand its roots in countries like China. The executive noted that Tesla’s goal of producing 20 million vehicles a year by 2030 requires the company to have manufacturing locations on every continent.
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“We’re building factories all over the world. The world is lithium-ion based for electric vehicles and batteries and we think we need to be in all the major markets around the world,” Denholm said, adding that companies like Tesla should make sure the supply chain is optimized.
“Producing motors on continents is critical because, again, whilst you are putting in a deliver chain for the lengthy term, you need to reduce the ones miles earlier than any person owns the ones cars, and that includes shipping and ocean freight because all those processes add to CO2 emissions,” he added, according to a Bloomberg News report. .
Tesla China is playing an increasingly large role in the company’s operations, and in the Q2 2022 update letter, it was formally revealed that the facility will be the EV maker’s largest factory by output. Following upgrades to its Model 3 and Model Y production lines, Gigafactory Shanghai is now expected to hit a capacity of around 1 million vehicles per year.
Asked if she was worried about Tesla potentially being caught in the middle of a strategic competition between the United States and China, the executive was consistent in her response. “Markets round the sector are actually critical, and so it is critical to have production capability on each continent,” Denholm said.
Tesla has so far enjoyed some notable advantages in China, such as low-interest loans, tax breaks and the rare permission to have only one vehicle manufacturing facility in the country. And while Tesla has sometimes faced scrutiny in China, Giga Shanghai is a point of pride of sorts for the local auto sector, thanks in part to the facility’s ability to export domestically-produced premium electric vehicles to foreign regions like Europe.