Musk Says China Factory Announcement Coming Soon

During Wednesday’s Q1 earnings call, Tesla CEO Elon musk dropped a few new details on the company’s factory plans.

After China recently said it will allow full foreign ownership of auto factories, Musk announced on the call that Tesla’s next Gigafactory will be built in China. In fact, Musk offered thanks to the Chinese government for lifting the restrictions. Previously, automakers needed to work through state-owned partners or pay a 25 percent import tax. This impacted the price Tesla could offer to Chinese customers.

Tesla currently currently builds cars in a former Toyota and General Motors joint facility in Fremont, Calif. The Gigafactory battery plant is located near Reno, Nev.

Musk said that going forward all new Gigafactories will also host vehicle manufacturing. Currently, battery, motor, power electronics and charger production are at Gigafactory, while vehicle assembly takes place in the company’s Fremont factory.

Musk has previously said that a Chinese factory would likely focus on Model 3 and Model Y production primarily for the local Chinese market.

The Model Y is expected to be built on the Model 3 platform to help remove complications in the manufacturing process and bring the vehicle to market faster.

Musk suggested on the call that the company would be making another factory announcement specific to Model Y production by the end of the year. He said it would be impossible to manufacture the vehicle in Fremont as the factory is “jammed to the gills.”

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