Tesla Reveals New Plans at Shareholder Meeting

Tesla’s head of worldwide sales, Robin Ren, revealed on Tuesday that the company plans to build its first factory outside of the U.S. in Shanghai, CNBC reported.

The Chinese government recently announced that it will allow foreign electric vehicle makers to fully own auto-factories there. Tesla’s move into China is hotly anticipated, as building some vehicles there would allow the company to avoid import tariffs.

Unlike Tesla’s first American factories, Tesla’s new so-called “Dreadnought” factories should produce both batteries and assemble vehicles in one place, CEO and chairman Elon Musk said at the meeting.

In the U.S., Tesla already operates a massive Gigafactory in Nevada, where it makes batteries for both its vehicles and home energy products. It also operates an assembly plant in Fremont, California where it makes the Model S, Model X and Model 3.

Musk also addressed past challenges in Tesla factories, explaining as he has in the past that the company has had mixed luck with automation.

Tesla’s shares recently deteriorated with numerous production delays for the Model 3 sedan, multiple fatal crashes involving Tesla’s much-hyped Autopilot driver-assistance system and a bizarre and combative earnings call with equity analysts – all of which have weighed on the stock since early March, Bloomberg notes.

Earlier, the Daily Beast published an insiders’ report on persistent problems at Tesla’s manufacturing plant, including fires and safety issues. The news outlet also noted that Tesla shares are down as much as 3.4 percent for the session.

However, that is not to say the company and its CEO Elon Musk have any dearth of believers who claim that Tesla is well on its way to achieving an “exponential” production rate.

“Our view is that Model 3 production won’t happen on a profitable basis until later in 2019; however, as we stated in the past, if the Model 3 hits its targets, the leverage is significant,” Needham analyst Rajvindra Gill wrote in a note to clients on Tuesday.

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