President Donald Trump has all along been advocating for the creation of more jobs in the US. The news about Tesla Inc (NASDAQ:TSLA) moving its manufacturing operations to Shanghai may not be what the president would have wanted. Anyway, the deal is already underway, and the Giga factory 3 is the new operational base of the company. The business giant has already pronounced the cutting off of its Model 3 Standard Range. It says that from 13th October it will no longer be receiving more orders of the brand.
Effects of the relocation
This news will be received with mixed reactions among customers. Those customers that wanted the Model 3 Standard Range will have to give up their aspirations and instead consider something else. The other group is the one wanting to make purchases from the Giga factory 3. The moment the company is done distributing the last imports, they will make their orders. The Tesla Model 3s to be manufactured in China won’t be anything less compared to the other brands by the company.
The popularity of the company’s Tesla Model 3 brand in China is exemplary according to reports. In the last quarter, there was a sharp uptick in terms of the sales made. An analyst at Piper Jaffray has provided interesting facts regarding the company’s performance. Over the third quarter, the company’s new auto registration moved up by about 175 percent in comparison to the 2018 third quarter.
Tesla’s presence in China and its take on the matter
Tesla admits that the heavy tariffs were part of the reasons it decided to set up a factory in China.
This is the very first time that Tesla has decided to construct a factory outside the United States. It is a move that will deprive employment opportunities to quite a significant number of US citizens.
The set up of a factory in China marks an end to the import tariffs it had to pay, thus increased profitability. Tesla seeks to boost its profits by providing proper training to its sales team as well. The company says it is ready to face up to all the challenges that will be associated with manufacturing vehicles locally.