Electric car leader Tesla reported global sales in the second quarter of $6.03 billion despite coVID-19 shock, with its Shanghai gigafactory making a big contribution by delivering 31,000 cars, while the company’s 3 plants in the U.S. suspended production for about two months.
China has a vital source of profit for Tesla. The 31,000 cars accounted for one-third of Tesla’s total global sales volume from April to June. According to the dollar results of the company’s quarter, sales earnings in China increased by 103% year-on-year to $1.4 billion, or 23.14% of the company’s overall profits.
Based on the functionality of the Shanghai gigafactory, Tesla CEO Elon Musk said at the World Conference on Artificial Intelligence in Shanghai last month that they were building an engineering team in China to offer more original engineering studies and progression in the country.
Tesla’s immediate progression in China is strongly related to the efforts of the Lingang Special Zone Administration, which is a component of the pilot industrial zone of China (Shanghai), where the new manufacturer of electric vehicles is located. In July 2018, Tesla signed an agreement with the Lingang Special Zone Administration to build a production base in Lingang. With a total investment of 50 billion yuan ($7.2 billion), the Shanghai gigafactory is Tesla’s first outdoor facility in the United States. It is also the largest allocation of foreign-owned production in Shanghai.
The Shanghai gigafactory began generating its first cars on November 7, just 16 months after the agreement was signed. Lingang’s maximum power and the number of favorable policies in the region will help Tesla’s ambitions, the company’s global vice president Tao Lin said.
Zhu Zhisong, deputy executive director of Lingang Special Zone administration, said Tesla’s example of success has been promoted to more companies, making the “Tesla model” The Center of Lingang’s Focus.
Zhu added that commercial land can be used for multiple purposes, which was first attempted in Lingang based on Tesla’s example. A one-stop shop is provided for new investment allocations in terms of assignment and approval construction permits.
“Lingang will serve as a brake for a full opening. It is our duty to carry out more reforms and make more progress so that Lingang can expand into a special economic zone of foreign influence,” Zhu said.
The company’s movements reflect his appreciation for Lingang’s maximum efficiency. Publicly available data showed that general capital investment in Lingang increased by 32.8% year-on-year in the first part of the year, while overall commercial production increased by 26% over the past year. A total of 141 new projects were signed in Lingang in the first six months, with an investment of 176.7 billion yuan.
While the company’s operations were seriously affected by COVID-19 in the first quarter, Lingang’s administrative framework proposed favorable fiscal policies to help companies go through difficulties.
To further facilitate Tesla’s operations, the tax workplace has conducted tax credit ratings and tax refund reviews, and the company is likely to get a tax relief given its large upfront investment.
Wu Jian, director of Lingang’s tax office, said the Tesla-style would be implemented in the rest of Lingang.
“Tesla’s core feature will be the new one for all corporations registered in the region. More state-of-the-art tax facilities will be incubated in Lingang so corporations can look for more sustainable progression here,” Wu said.