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Tesla will build Model 3, Model Y at new Shanghai factory, report says

Tesla hopes to eventually produce 250,000 cars per year at this location.

Nick Miotke/Roadshow

While Tesla is still in the early stages of developing its upcoming factory in Shanghai, China, a new report gives us a better idea of what Tesla intends to build in that space.

Tesla's Shanghai facility will focus on two smaller electric vehicles, Reuters reports, citing a Shanghai government filing by an environmental assessment firm. Those two vehicles are the Model 3, the automaker's smaller sedan, and the upcoming Model Y, a similarly sized electric SUV meant to slot beneath the Model X.

It appears the filing also tempers production expectations at the Shanghai facility. Reuters reports that the filing mentions an annual production capacity of 250,000 vehicles. When Tesla and Shanghai signed a preliminary agreement in July, that production estimate was closer to 500,000 vehicles per year, according to a statement Tesla gave at the time.

This is the only Model Y teaser that's been made public thus far. It's... vague, to say the least.

Tesla

Tesla did not immediately return Roadshow's or Reuters' requests for comment.

Tesla's first overseas factory will be pretty impressive. Following this summer's preliminary agreement, Tesla announced this week that it has secured the rights to 212.5 acres (9.26 million square feet) of land that will eventually be home to its Shanghai factory, which is expected to build both cars and batteries. The company has already started hiring in the area. The factory is expected to cost more than $2 billion when all is said and done. It will take several years to get everything moving at full speed, so don't expect those estimated production numbers to show up the second the doors open.

Building out its operations in China is a wise idea, especially given recent events surrounding the relationship between China and the US. With tariffs being lobbed back and forth, Tesla has already raised prices on its US-built models that are being exported to China. Building cars in China would greatly reduce the price Chinese citizens must pay, and given the country's ever-growing hunger for electric vehicles, Tesla wants to make sure it's not pricing itself out of contention.

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