Tesla's China expansion hits speed bump amid industry overcapacity

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Tesla's ambitious plan to boost auto production in Shanghai, its most valuable plant globally, hinges on China's approvals to develop 70 hectares (172 acres) of former farmland that is currently overgrown with wildflowers.

A view of a Tesla sign at its factory in Shanghai, China June 12, 2023. REUTERS/Aly SongTesla has aimed to produce 450,000 cars a year at new siteambitious plan to boost auto production in Shanghai, its most valuable plant globally, hinges on China's approvals to develop 70 hectares of former farmland that is currently overgrown with wildflowers.

"You could argue that as Tesla, I've got new products, I need to have a new factory to build them in," he said. "But viewed from the China government's point of view, all they see is a market that's oversupplied." After meetings with senior Chinese officials including Vice Premier Ding Xuexiang, Musk told a small group of Tesla staff that he saw "positive progress" in discussions about the expansion without elaborating, said the person, who was not authorised to speak publicly.

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