Tesla is setting its sights on the Canadian market with its Chinese-made Model Y, marking the first time the automaker has shipped vehicles from China to North America. According to sources, the Canadian version of the Model Y has already begun production at Tesla’s Shanghai factory with the goal of producing nearly 9,000 units this quarter.
The benefits of Chinese production Tesla
The decision to produce the Model Y in China is not without merit. With relatively low labor costs and favorable government policies, production costs in China are lower than other countries. Additionally, China’s expertise in auto parts and intelligent manufacturing provides support for Tesla’s production and export to North America.
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It’s worth noting that Tesla’s Shanghai factory is the largest and most cost-effective factory in the world. This, coupled with the use of lithium-iron-phosphorus batteries in the Model Y, which are cheaper, safer, and more durable than other battery types, makes the Chinese-produced Model Y an attractive option for Tesla.
Not a new concept, last year alone, over 270,000 Model Y and Model 3 sedans were exported to Europe and other markets from Shanghai, accounting for a fifth of Tesla’s global sales.