Tesla Inc TSLA has confirmed plans to build a second manufacturing plant in Shanghai as it looks to double production capacity in China, Reuters reported on Tuesday, citing a letter from the Elon Musk-led company addressed to local officials.
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What Happened: Tesla plans to expand its plant in Shanghai and build a new facility on nearby land in the same area.
The new facility will add an annual capacity of 450,000 cars and produce Model 3s and Model Ys.
Tesla did not immediately respond to Benzinga’s request for comment.
Why It Matters: Giga Shanghai accounted for more than half of Tesla’s global deliveries last year, delivering 484,130 units — a three-fold jump over 2020.
Giga Shanghai commenced production in December 2019, a year after construction began at the site. Built with an investment of $2 billion, the manufacturing site has quickly become a key element in Tesla's production strategy.
See Also: Elon Musk Says Tesla Likely To Make Over 1.5M Cars This Year
Besides Shanghai, Tesla currently makes cars in Fremont, California. Two other plants - Giga Berlin and Giga Texas — came online recently and are expected to significantly boost production when ramped up to full capacity.
Tesla aims to make 1.5 million cars this year. Musk told analysts last month that Tesla has a reasonable shot at delivering a 60% rise in production in 2022 over the last year.
Price Action: Tesla closed 0.7% higher at $909.25 on Tuesday.
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