Plants, Ramps and Capacity

On 7 January 2019 Tesla broke ground for a car plant on about 86 hectares of land at Lingang, on the edge of Shanghai. Six months earlier it had signed an agreement with the Shanghai government, and in October 2018 it had won the land. On 30 December 2019, less than a year after the groundbreaking, the plant delivered its first Model 3s to Chinese customers (company). It was the first car plant in China wholly owned by a foreign company: China had ended the requirement that foreign makers of electric vehicles take a local joint-venture partner in 2018, and Tesla was the first to use the change. Chinese banks lent against the plant, reported at more than CNY 11 billion, about $1.6 billion, and the municipal government delivered permits, land and power on a schedule measured in months (reported).

The speed came from what the plant did not have to invent. The Model 3 was a known product: Tesla had spent 2017 and 2018 learning how to build it in Fremont, at a cost Chapter 14 described, and Shanghai copied a process that had already been debugged rather than designing one. It bought most of its parts from Chinese suppliers, with cells from CATL and LG's plant in Nanjing, which cut freight and part costs. The Model Y followed from January 2021, a battery plant, the Shanghai Megafactory of 20 GWh a year, began production nearby in the first quarter of 2025, and Tesla's own capacity tables put the site at more than 950,000 cars a year by 2023, its largest and, by the usual account, lowest-cost plant (company, reported). It also showed the exposures that come with speed and low cost: the plant stopped for weeks during Shanghai's lockdown in April and May 2022, and from 30 October 2024 its exports to Europe paid an EU countervailing duty of about 7.8% (European Commission).

Chapter 8 told how Intel broke ground in Ohio in 2022 and does not expect the first fab to operate until 2030–31, and how TSMC's first Phoenix fab took about four and a half years from announcement to volume. A car plant in Shanghai went from mud to customers in a year; a chip fab in Ohio will take about eight. Both are plants, and both are judged by the same question: how long, and at what cost, between the money going in and the plant running full.