Back in July, Tesla announced it had signed a deal in China allowing it to build up to 500,000 vehicles a year there. Now Elon Musk’s company has acquired the land to build its manufacturing facility in Shanghai.
The location of the Chinese Gigafactory was set as Shanghai because it has a free-trade zone, which means there’s no need to partner with a local Chinese company before manufacturing can begin. As Reuters reports, the Shanghai government sold Tesla a plot of land that’s roughly 860,000 square meters (213 acres) in size.
The cost of the land hasn’t been confirmed by Tesla, but the Shanghai Bureau of Planning and Land Resources lists a recent auction for a 864,885 square meter plot of land as costing just over $140.5 million. It seems unlikely two pieces of land of roughly the same size would be sold so close together, so this is probably what Tesla paid.
The new Gigafactory is expected to cost $2 billion to build, but with increasing pressure on governments to curb emissions combined with the very high tariffs imposed on imported vehicles, the investment makes a lot of sense. The local economy will also benefit from the thousands of new jobs the Gigafactory will create and the purchase and delivery of the components Tesla needs to build its electric vehicles.
Meanwhile, closer to home Tesla managed to deliver 83,500 cars during the third quarter. If that continues to grow and the Chinese Gigafactory comes online, it won’t be long until 500,000 vehicles a year seems like a tiny amount.
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This article originally published at PCMag here