Tesla breaks ground on Shanghai factory

Jan. 7 (UPI) -- Construction of a new Tesla factory in Shanghai began on Monday, the electric auto company's first plant outside the United States.

The 210-acre site in Shanghai's Lingang district, the center of China's auto industry, will produce Tesla Model 3s for the Chinese market by the end of 2019, CEO Elon Musk said at the ground-breaking ceremony.

Musk and Shanghai Mayor Ying Yong led Monday's ground-breaking event.

The plant will have a capability of producing 500,000 electric vehicles per year when fully operational, but Tesla said there's no target date for full production.

China accounts for about 35 percent of all global electric vehicle sales. Buses and the majority of taxis in the city of Shenzhen, a hotbed of technology, are already electric-powered, and the Chinese government established a goal by 2025 that 20 percent of all car sales be plug-in hybrids or battery-powered.

"Over the last six years, we have opened 60 Tesla locations, nearly 1,500 Superchargers, and more than 1,850 destination chargers in the country," Musk said. "This week, we've started taking online orders for Model 3 in China, so that customers can configure their vehicle to take delivery in the weeks ahead."

Tesla competes in China with local electric auto manufacturers Nio, BYD Auto, BAIC Group, and government-owned Shanghai Automotive Industries Corp.

Producing vehicles in China could reduce Tesla's costs of tariffs and ocean transport for Tesla which, the company said in October, burdened it with a cost disadvantage of 55 to 60 percent.