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Tesla halts expansion plans in Shanghai, report says

The electric car manufacturer was going to increase capacity there in hopes it could sell Chinese-built cars in the US.

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Tesla is pumping the brakes on plans to bring Chinese-made cars to the US.

Tesla/Craig Cole/Roadshow

Tesla's Chinese Gigafactory outside of Shanghai is humming along nicely, cranking out tons of Model 3s and Model Ys for the Chinese domestic market. Tesla had bigger plans for the factory that involved exporting Chinese-made vehicles to other markets around the globe, but according to a report published Tuesday by Reuters, those plans have changed.

The Shanghai Gigafactory is set up to build upward of half a million vehicles per year, but Tesla had been eyeing land nearby to increase its capacity. However, the continued economic tensions between the US and China and their associated tariff increases make those expansion plans less attractive.

Still, it's not as if these derailed expansion plans mean that Tesla is hurting. On the contrary, it's currently seeing a sales boom in the world's largest market for cars. It's enough of a boom that  Tesla made over $3 billion there from January to March. Chinese sales currently account for around 30% of Tesla's revenue.

Even if things cool down between China and the US, it's not entirely clear how successful a Chinese-built Model 3 would be in America, mainly because there isn't a great deal of data to compare it with, since we don't get many Chinese vehicle imports here, with Buick's Envision being the notable exception.

We'd typically ask Tesla to comment on something like this, but since it dissolved its PR department, we can't.

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