Tesla defends China presence as key to goal of making 20 million cars a year

Tesla delivered 76,965 Chinese-made vehicles in August, just shy of June's record 78,906. PHOTO: REUTERS

CANBERRA - Tesla chair Robyn Denholm has defended the US electric carmaker's focus on China and plans to expand further there, saying that reaching a goal of making 20 million vehicles a year by 2030 will require manufacturing capabilities on every continent.

"We're building factories around the world," said Ms Denholm after an address to the National Press Club in Canberra on Wednesday. "Our view is the world is going to electric vehicles (EVs) and to batteries that are lithium-ion based, and we need to be in all of the major markets around the world."

Tesla recently opened factories in Berlin and Texas, on top of plants in Shanghai and California.

The EV maker's China operations are back in full swing after a production-line upgrade and after the city's Covid-19 lockdown earlier this year slowed production.

Tesla delivered 76,965 Chinese-made vehicles in August, just shy of June's record 78,906.

"Producing vehicles on continents is important because, again, when you're setting a supply chain for the long term, you want those miles those cars travel before someone actually owns them to be the shortest possible, and that includes shipping and sea freight because all of those processes add to CO2 emissions," Ms Denholm said.

Tesla has set a goal of manufacturing 20 million electric cars a year by 2030, up from the just under the one million vehicles it produced in 2021. The Shanghai upgrade alone doubled the plant's annual capacity to about one million units.

"Markets around the world are really important, and so having manufacturing capability on each of the continents is important," Ms Denholm said, when asked specifically if she was concerned about Tesla being caught up in the strategic competition between the United States and China.

Tesla initially enjoyed a red carpet entry to China when it entered the country in 2018 - winning tax breaks, cheap loans, permission to wholly own its domestic operations and help in constructing the Shanghai gigafactory at breakneck speed.

That helped Tesla turn China into its most important market outside the US.

But relations have cooled somewhat recently, with a series of high-profile safety incidents, protests by disgruntled customers, regulatory scrutiny, and concern that the cameras built into its cars could be used for spying.

The EV giant went to great lengths to keep its Shanghai plant running during the city's two-month lockdown, housing thousands of workers on-site - they slept on the factory floor and worked 12-hour shifts, six days a week. BLOOMBERG

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