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Tesla to expand capacity at China plant

Tesla plans to expand capacity at its Shanghai car plant, allowing it to increase staff numbers at the site by about a third and boosting production in the world’s largest electric car market, according to a company filing.

The US carmaker will spend roughly Rmb1.2bn (£140m) to increase capacity at the facility, taking the maximum number of workers at the plant from 15,000 to 19,000.

The filing in China did not say how many more vehicles the plant would be able to produce.

Its Shanghai site, which began production late in 2019, is currently able to make about 450,000 cars annually, just shy of the number of cars that Tesla sold globally last year.

The expansion comes after Tesla was forced to apologise to consumers in China earlier this year after its response to complaints sparked protests against the company and drew the ire of state media.

Chief executive Elon Musk has set a customarily ambitious goal of producing 20m vehicles a year by the end of the decade, an achievement that, if successful, would make Tesla twice as large as Volkswagen or Toyota, the industry’s two largest producers today.

Tesla is on track to make close to 1m vehicles this year, despite most of its rivals curtailing production because of global chip shortages.

In its third-quarter results last month, Tesla said revenues rose 57 per cent to $13.8bn compared with the same period a year earlier, while it posted a record quarterly profit of $1.6bn.

While Musk has not set out the network of plants he expects to build to help Tesla reach its 2030 goal, the business is erecting several sites simultaneously.

Tesla is already building a production facility in Germany, as well as a site in Texas, and there have been reports the company is also exploring a second Chinese production location.

Musk told Tesla’s investors last month that the Shanghai site already produced more vehicles than its flagship facility in Fremont, California.

Its China site makes the Model 3, which it sells locally and exports to Europe, and the Model Y.

The electric carmaker banked on a local production base and the use of cheaper batteries to help drive sales in China, but its entry into the market has not been without bumps.

In June, the group was forced to recall almost every vehicle sold in China over a software glitch that took control of the vehicle.

Its cars have also been banned from some government sites because of fears about the cameras used in its lane-keeping system. Last month Tesla opened a data centre in Shanghai to help assuage concerns about locally-collected driving and camera data.

Additional reporting by Wang Xueqiao in Shanghai

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