Tesla to produce EV charging piles in Shanghai

US electric vehicle (EV) manufacturer Tesla plans to build a plant in Shanghai to produce charging piles, aiming to meet increasing demand for convenient and fast-charging services from Chinese consumers.

The plant, with an investment cost of 42mn yuan ($6.38mn), is scheduled to complete construction and start production in February 2021. It will have a designed capacity of 10,000 units/yr.

Tesla currently imports its charging piles from the US, so the planned plant in China is expected to reduce its production costs and logistics fees, according to market participants.

Rapid growth in sales of new energy vehicles (NEVs) has bolstered demand for charging services. China's NEV industry began to recover in the second quarter from the impact of the Covid-19 outbreak, which started in late January, supported by government stimulus measures to encourage the use and purchases of such vehicles.

China's NEV charging points reached 1.498mn by the end of October, up by 21pc from November 2019, according to a white paper released by stated-owned power transmission and supply firm State Grid. The vehicle-to-charging point ratio in China increased from 7.84:1 in 2015 to 3.5:1 in 2019.

Shanghai announced in July plans to further accelerate construction of NEV infrastructure to support developments in the domestic industry, including adding 100,000-200,000 of public and private charging piles over the next three years.

Tesla expanded the capacity of its Shanghai factory to 250,000 Model 3 cars/yr in the third quarter, up by 50,000 cars/yr from the second quarter. Production of the Model Y is expected to begin at the Shanghai factory in 2021. Car production capacity at the Shanghai factory has risen by 67pc since the third quarter of 2019.