Tesla has increased the parts localization rate at its Gigafactory Shanghai to 98%, further strengthening the electric vehicle maker’s reliance on China’s automotive supply chain at its largest global production facility.
The company disclosed the latest figure in a statement released during the ninth China International Import Expo (CIIE), which opened in Shanghai on Thursday. Tesla had previously described the factory’s localization rate as consistently exceeding 95%.
Chinese Suppliers Contribute to Product Development
Tesla’s cooperation with Chinese partners extends beyond component sourcing to include product engineering and development.
One example is the Model Y L, whose seat comfort features, including armrests and leg supports, were jointly developed by Tesla and local suppliers to address the preferences of Chinese customers.
Initially launched in China, the Model Y L has since expanded into other Asia-Pacific markets, including Japan, South Korea and Australia. Tesla also introduced the model in the US market in July this year.
The automaker currently works with more than 400 Tier-1 suppliers in China, with over 60 having joined its global supply chain network.
This year also marks the fifth anniversary of the establishment of Tesla’s Shanghai Research and Development and Innovation Center, highlighting the expanding role of its Chinese operations beyond vehicle assembly.
Gigafactory Shanghai Produces a Vehicle Every 30 Seconds
Construction of Gigafactory Shanghai began in January 2019, with production starting before the end of that year. The facility became China’s first wholly foreign-owned vehicle manufacturing project and has an annual production capacity of approximately one million vehicles.
The plant primarily manufactures the Model 3 and Model Y for domestic and international markets.
According to Tesla, the factory covers approximately 730,000 square metres, with around 93.3% of its total floor area allocated to production workshops. The company said the facility was designed to prioritise manufacturing capacity, without elaborate reception halls or executive-only dining rooms and elevators.
Production currently averages one vehicle rolling off the assembly line every 30-plus seconds. Tesla also reported that the factory maintains an industrial waste utilisation rate above 94%.
The 98% localization rate underscores the importance of Chinese suppliers to Tesla’s global manufacturing operations, while the growing involvement of local partners in product development reflects a deeper integration with the country’s automotive industry.