INSUBCONTINENT EXCLUSIVE:
Image copyrightReutersImage caption
Elon Musk and Shanghai's Mayor Ying Yong attend the Tesla Gigafactory ceremony in
the city.
Tesla boss Elon Musk has broken ground at a new factory in Shanghai, the electric carmaker's first manufacturing
plant outside the US.The facility will produce Model 3 and Model Y cars as it pushes to grow its presence in the world's largest car market
The American automaker faces rising competition from local rivals in China
But the new factory would help Tesla avoid US tariffs on car imports into the country
In a series of tweets on Monday, Mr Musk said the plant would build "affordable versions" of the Tesla Model 3 - the carmaker's mass market
vehicle - and its proposed Model Y for the Greater China region
He said the so-called Gigafactory - which could cost as much as $5bn (£4bn) according to reports - would start Model 3 production at the
end of year."Aiming to finish initial construction this summer, start Model 3 production end of year [and] reach high volume production next
year" the entrepreneur tweeted
The push into China comes amid simmering trade tensions between Beijing and Washington
US carmakers have been vocal critics of President Donald Trump's tariffs, which have targeted the car sector among others
In October, Tesla warned that tariffs in China were creating challenges
China has raised import duties on US-made cars as part of the broader trade fight with the US.At the time, Tesla said the costs that go into
its cars are roughly 55% to 60% higher than for local firms, when tariffs and sea transport costs are take into account.Negotiations aimed
at resolving the bitter trade dispute between US and China taking place in Beijing this week
