Tesla Clears a Big Obstacle for the Model 3 and Model Y


Tesla had a rough start to the week, but the company is finally getting some good news to end it.

Tesla’s  (TSLA) – Get Tesla Inc Report bad week is ending on a positive note. 

Earlier this week, Tesla announced price increases across its entire range of vehicles. It was the electric vehicle maker’s second price increase this month after it increased the cost of some of its long-range models last week.

Inflation is driving up the price of its entire fleet, but the price of the Model 3 may be the most concerning for Tesla as that base model is supposed to be the affordable one. 

The Model 3 Rear-Wheel Drive saw its price increase to $46,990 from $44,990 while the Long Range version of the vehicle saw its price increase to $54,490 from $51,990.

Another bit of bad news came days later as Chinese officials, battling a new outbreak of Covid-19, began locking down large population centers across the country to combat the spread. 

Those lockdowns forced Tesla to shut down its factory in Shanghai for a couple of days, but now the company is back to making cars at what has turned out to be its most important plant in the world.

Tesla Restarts Production in China 

Tesla China is back baby!

The company reportedly resumed production at its Shanghai facility Friday after a two-day pause as an uptick in coronavirus infections in China has resulted in lockdowns across the country. 

Shanghai has begun easing its Covid controls, allowing workers at the 24 hour plant the freedom they need to work their normal shifts. 

Enough workers have returned to their positions to get the factory running, Reuters reported citing sources, 

The factory restarted its two-shift production from 7 a.m. local time to run around the clock, it was reported. Returning workers are required to be tested for Covid-19.

Tesla Has Deep Ties to China

Tesla is the leading market share leader in the U.S., but Elon Musk and the company know that much of the company’s growth aspirations are tied to its performance overseas.

Unlike many U.S. tech companies who have a shaky relationship with the Chinese government, Musk and Tesla enjoy a pretty significant seat at the table.

Earlier this month, Musk took a ride with Qin Gang, the Chinese ambassador to the United States.

The close ties to government officials are paying off for Tesla, which was able to top 50,000 vehicles delivered in each of the final three months of 2021. That rate puts Tesla on pace to deliver more than 600,000 vehicles annually in China. The company produced 470,000 vehicles in China.

Last November, Tesla announced plans to invest 1.2 billion yuan ($187.91 million) to expand production capacity at the Shanghai plant. Tesla is the only foreign passenger car plant in China that is wholly owned by the company and not forced to be operated by a joint venture. 

In 2021, Musk said that Tesla’s Shanghai factory has now surpassed the production capacity at its Fremont factory, which produced nearly 450,000 units last year. Tesla has made the Shanghai factory its new main export hub just a couple of years after it started production in December 2019.