Tesla Inc prepares to boost its production capacity for certain auto parts at its $2 billion factory in China, according to a government document observed by Reuters, as it pushes to localize its supply chain in the country.
The U.S. automaker, which started making deliveries Model 3 electric sedans from its Shanghai factory in December, prepares to add lines to create more battery packs, electric motors, and motor controllers, according to the document presented by Tesla to Shanghai government.
Tesla, which as of end-December used about 70% imported components for the vehicles it made in China, did not immediately replied regarding this report.
The document shows that Tesla wants to almost double its yearly building capacity for cooling pipes, a key part in a car’s heat management system, to 260,000 sets annually from 150,000. It did not provide capacity details for other components.
The planned production line will not concern battery cell manufacturing but will package out-sourced battery cells at the plant, the document mentioned.
Tesla has previously stated it wants to localize its whole supply chain in China by the end of 2020.
The company is also constructing an additional stamping line to accelerate car production in Shanghai, according to construction documents observed by Reuters.
The Shanghai factory is important to Tesla’s growth strategy. There it wants to produce 150,000 Model 3 sedans and later increase output to 250,000 annually, including the Model Y, a Shanghai government filing noted in 2018.
The company aims to deliver over 500,000 vehicles worldwide by end-2020.
Tesla’s production and delivery plans in Shanghai, however, have been disrupted by a coronavirus outbreak that has killed over 3100 people in China. Passenger car retail sales in China dropped around 80% in February because of the epidemic.
