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Electric cars in China

Tesla wins approval for mass production at Shanghai Gigafactory

US electric-car producer touts early 2020 deliveries of made-in-China Model 3

Tesla says the Shanghai Gigafactory was built in just 10 months and cost 65% less than comparable Model 3 plants in the U.S.   © Reuters

PALO ALTO, U.S. -- Tesla received approval to begin mass production at its Shanghai Gigafactory, Chinese authorities announced Wednesday, as the American electric-car producer starts taking orders for "made in China" vehicles with delivery expected in early 2020.

Tesla's Shanghai factory will produce cars for the Chinese market from the country's first fully foreign-owned automobile plant, even as Washington and Beijing remain embroiled in a long-running trade dispute.

The permit for mass production of electric passenger vehicles was announced on the website of China's Ministry of Industry and Information Technology. Tesla began trial production at the Shanghai Gigafactory last quarter.

The automaker last week unveiled those Model 3 trial vehicles on Weibo, a popular social media platform in China. The Shanghai factory's Model 3s look identical to those made in U.S. plants, except the tails are marked with "Tesla" in Chinese.

Model 3 deliveries from the Shanghai Gigafactory are slated to begin during the first quarter, according to the Tesla China website, which lists the standard model with a starting price of 355,800 yuan ($50,700).

But Tesla still needs to obtain approval from the regulator for sales of the electric auto. Chinese authorities have yet to disclose such a permit for Shanghai-made Tesla vehicles.

The Shanghai Gigafactory was built in just 10 months and cost 65% less than comparable Model 3 plants in the U.S., Tesla said. CEO Elon Musk has forecast that 1,000 Model 3s will be rolling off assembly lines every week by the end of 2019, helping Tesla almost double its annual production.

Tesla is required to contribute roughly $323 million in annual Chinese taxes starting at the end of 2023 as part of the company's lease agreement with the Shanghai municipal government.

Tesla plans to replicate the Shanghai Gigafactory's cost-saving success worldwide. Musk earlier announced during an awards ceremony in Germany that Tesla's European Gigafactory will be built in the Berlin area. The European factory is expected to begin production of both the Model 3 and Model Y in 2021.

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