Tesla booked revenues of USD 2.98 billion from sales in China in 2019, up 69.5% year-on-year, the company said in a filing with the United States Securities and Exchange Commission (SEC) on Thursday.
As the world’s largest market for electric vehicles, China was also the second-biggest market for the US-headquartered electric vehicle (EV) maker Tesla in 2019, following the US, which generated a revenue of USD 12.65 billion in the past year, according to the filing.
The surge in 2019 comes after Tesla reported revenues of USD 1.76 billion from the Chinese market, down from USD 2.03 billion reported in 2017, as sales of premium models were negatively affected by increased import duties on components sourced from China, as well as by tariffs imposed on vehicles exported to China due to the China-US trade war.
Tesla expects to ramp up production of its Model 3 vehicles in the new Shanghai Gigafactory above the installed annual production capacity of 150,000 vehicles, said the EV maker in the filing. Tesla also said it has started the next phase of construction of the Gigafactory, which will allow it to start producing its Model Y in the Shanghai facility.
The Shanghai factory allows Tesla to increase the affordability of EVs for customers in local markets by “reducing transportation and manufacturing costs and eliminating certain tariffs” on vehicles imported from the US, resulting in competitive local pricing and a surge in demand, said Tesla in the filing.
The company has reportedly produced 2,625 Model 3 vehicles at the Shanghai factory in January, before the beginning of the Chinese New Year holiday on Jan. 24. This placed Tesla fifth among all EV makers in China by the number of vehicles manufactured that month.