Tesla reveals plans for a new factory in Shanghai at shareholder meeting

Key Points
  • Tesla revealed plans to build its first foreign factory in Shanghai at its annual shareholder meeting on Tuesday.
  • A factory in China could allow Tesla to avoid import tariffs there.
  • Head of worldwide sales, Robin Ren, promised more details about a partnership in China and the new factory soon.
Tesla's new Model 3 car on display is seen on Friday, January 26, 2018, at the Tesla store in Washington, D.C.
Salwan Georges | The Washington Post | Getty Images

At a shareholder meeting on Tuesday, Tesla's head of worldwide sales, Robin Ren, revealed that the company plans to build its first factory outside of the U.S. in Shanghai.

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.

Should Musk's roles be split within Tesla?
Should Musk's roles be split within Tesla?

In the states, 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 reflected on past challenges in Tesla factories, explaining as he has in the past that the company has had mixed luck with automation:

"We've made a lot of mistakes with Model 3 production. We're confident we know how to address them, we are addressing them...The approach to automation that we've taken in some cases has worked in some cases has not. But it's clear that there are some elements of production which are really well-suited to people doing it, and some parts really well suited to robotics...It sort of makes sense to start off with an initial production line that has a bias towards people, then automate parts of the production system that are most painful and difficult for people to do."