Tesla’s first overseas production facility, located in the eastern suburbs of Shanghai, cost 65% less than that of the United States
Tesla took the markets by surprise with third-quarter earnings announcements, cheering the market in after-hour trading backed by the news of having started test production at its new Shanghai facility.
Built in just 10 months, Tesla’s first overseas manufacturing facility on the outskirts of the eastern Chinese city of Shanghai cost 65% less than the US-based twin. This is confirmed by the same report on the company’s third quarter earnings.
Tesla recorded a quarterly profit of $ 143 million after two consecutive quarters in red
Tesla, in recent days, recorded a quarterly profit of $ 143 million after two consecutive quarters in red. Its profits are compared to the expectations of Wall Street analysts of $ 257 million in losses and against the background of the $ 311 million of net profit it recorded in the third quarter of 2018 – its best quarter ever – in contrast to which his most recent earnings have fallen by more than half.
Revenues from its automotive sector were $ 5.35 billion in the third quarter, down 12% compared to the same period a year ago. In any case, the US giant EV failed to reach the internal target of 100,000 vehicles delivered, dispersed over several thousand units.
Tesla is already producing test vehicles at the Shanghai Gigafactory
Tesla attributed the profits to fundamental improvements in operating efficiency, including greater absorption of fixed costs, reduced production costs and better vehicle quality. Total gross profit during the quarter, which ended September 30, rose to 22.8% from 18.9% in the previous quarter.
The company has also announced that it is already producing test vehicles at the Shanghai Gigafactory, from general assembly to bodywork, to paint. The project was awarded to the central government, which is now finalizing the license and other government requirements.
Musk expressed his appreciation for the Chinese government
The Chinese government has set aggressive targets for electric vehicle sales by 2025, offering extensive support to Tesla to establish its production facilities in the largest electric vehicle market in the world.
Musk expressed his appreciation for the Chinese government publicly at the World Conference on Artificial Intelligence in Shanghai in late August. “The number of advances that can be made in the Chinese market is impressive.”
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