Why did Elon Musk choose Shanghai for Gigafactory?

Why did Elon Musk choose Shanghai and how will Tesla pay for it.
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[CuriousElephant]

Hey guys, I did not go into the detail as to why Shanghai was chosen instead of another Chinese city. The reason goes deeper, Shanghai, Zhejiang (province), Jiangsu (province) region are the engines of growth of China with many upstream suppliers and many potential customers, therefore, having a factory here mean Tesla could react faster to both its customers and its suppliers. Enjoy!

[exSCV]

In a couple years, China will built Zesla with half price of model 3.

[xieyihaostar]

Someone could literally use this presentation for a consulting job interview!

[dlwatib]

Tesla may well take advantage of the supply chain in China. But that's obviously not the reason they made their decision to go ahead with Gigafactory 3 in Shanghai. It's all about tariffs, financing and Chinese demand.

Tariffs: A Tesla built in China avoids a Chinese import tariff of 25%, making it imperative that a gigafactory be built in China as soon as possible. There is also currently a trade war between the US and China so the trade situation is unstable and unpredictable. It's best for Tesla to avoid that political turmoil as much as possible. The current situation made it urgent to move up the Chinese gigafactory ahead of the European one.

Financing: Tesla can finance the Gigafactory 3 in China. That way it doesn't impact the borrowing capacity of the rest of the company.

Demand: Governments in China are doing everything they can to encourage the adoption of EVs and discourage the adoption of polluting technologies such as gasoline and diesel engines. China currently has the largest and fastest growing EV market in the world.

Unfortunately, your video didn't say why Shanghai was chosen over any other city in China. That's the real question that you should try to answer.

[rishiraje]

What do you mean the demand side is not convincing?

China is the largest market for EV's in the world.

[rickkode]

i noticed the picture of the model 3 at 7:13 is the model x

[jerrycheng]

Model S
Model 3
Model X
Model Y

S3XY?

[pegasusted]

I think there might be something else to take into consideration when thinking about the Shanghai GF. BFR. When he gets BFR working, if he puts a pad somewhere near Shanghai GF, he could test the feasibility of Sub-Orbital travel. I think if he showed the ship 30 mins to Shanghai actually works I think it would be insane how many businesses would be interested. Especially for those who's employees do a lot of travelling or even for cargo transport for perishables or urgent medical transportation.

[bernardoramos]

When I were in Shenzhen I was amused by the electric buses and taxis. NO noise and NO smoke! Just amazing!

[jkenny]

Exciting, last time I was in China mid last year it was only 70% EV taxi fleet, didn't know they finished the switch.

[cbrtdgh]

I think another advantage of having the factory in Shanghai is that it will avoid large import tariffs on the Tesla vehicles? Making them more competitive in the worlds largest electric car market. As suspicious of China as I am, I still think this is a sensible move given Musk's motivations. Also, remember what Musk wants is a proliferation of electric cars, if Tesla goes the way of Apple in China, would he even care? As long as the world gets its electric cars, that's the goal.

[wunder]

Nice video! But why Shanghai and not Shenzhen?

[glenngoodale]

Thank you for taking the time to put this video together

[hardware_geek]

Can you do a video about the boring company

[hoffmantnt]

Why would you assume the European Gigafactory would be delayed by two years? Telsa is indicating it will be announcing that factory much sooner than that.

[chikaikwueze]

I like how you analyse your videos. Very informative and clear

[TxCwby]

Is it possible to consider (can’t believe i am suggesting this), supply proximity, AND stability of supply. Is it possible Tesla leadership consider China a SAFER place to have suppliers and production activities?
Crisp analysis, CE! Your attention to the specific drivers weighing in on the decisions which have to be made is very thorough. Thank you, Sir.

[brenttaylor]

Spot on. Why did I just now see your video! Just subscribed!

[louiswu]

It's amazing that you know CATL, It's a totally brand New company but is growing in a super super super rapid speed.the first time i heard it was built up, then a couples of years later, second time i heard it has already IPO.

[gregfredericks]

Great job Lei I think this was an A+ video.