According to the article – which is confirmed Reuters – Production of export vehicles will start in the fourth quarter of 2020. Tesla plans to sell these MIC Model 3 units to other Asian countries, Australia, New Zealand and mainly Europe. Ironically, it may be that Tesla cars make some of the first Chinese vehicles to reach the Old Continent in higher versions.
In addition to the superior quality these Chinese Tesla offer, exporting them may also indicate that the Chinese market is not ready for all the cars that Giga Shanghai can produce. It may also mean that it is cheaper to export them from China than from the US.
With this, Tesla can keep prices in all these countries at the same level that they are currently doing and improve profitability, as some analysts say in both articles. The company may charge less to make cars more attractive and gain market share.
There are other fascinating developments related to this decision. Without the need to produce cars for other markets, Fremont could spend more time fixing its manufacturing or supplying more vehicles in the US.
Straight from the shoulder, Tesla should start with the former and then adopt the latter until Giga Austin is ready to pump its products out. In addition to Siebertruck, the Texan factory will also make the Model Y and Model 3 for the East Coast.
Another thing that could happen is the sale of Model 3 units with LFP batteries in markets other than China. This could be strategic at a moment in which Volkswagen has started delivering ID.3, mainly if Tesla can sell such a Model 3 at similar prices then VW will charge for an entry-level version of the electric hatchback .
If Tesla’s factory is now slated to export due to insufficient demand, it may soon need to deliver cheaper vehicles Tesla wants to develop and build there – especially in the operation of Giga Austin and Giga Berlin with. It will be interesting to see how this new strategy unfolds.
Sources: Bloomberg and Reuters