Shall we dance? Tesla in tune with city policies
The new Tesla factory in Shanghai has become a 鈥減oster child鈥 in the city鈥檚 campaign to embrace foreign investment as part of its ambition to become a global hub of technology ingenuity and environmental protection.
The US electric car company recently rolled its first cars off the assembly line, just a year after groundbreaking for the site.
At an event marking the milestone on January 7, Founder and Chief Executive Officer Elon Musk danced onto the stage as Model 3 sedans were driven, one by one, for presentation to 10 customers. The images went worldwide.
Musk has plenty to dance about as the company rachets up its presence in the world鈥檚 largest auto market. The company plans to ramp up production to 500,000 cars a year in two or three years. Its current capacity at the Shanghai plant is over 3,000 Model 3s a week.
The starting price of the Shanghai-made Model 3 sedan is about 323,800 yuan (US$46,650). Government subsidies for clean-energy cars and the company鈥檚 pledge to source more local components could reduce that cost further.
Tesla鈥檚 US$2 billion Gigafactory, its first outside the US, is located in the Lingang Special Area of the China (Shanghai) Pilot Free Trade Zone. It is the largest foreign-invested manufacturing project in Shanghai.
The 357 days between ground-breaking and production marked a new record for global automakers in China.
At the event, Tesla announced that its Shanghai team will start work on Model Y prototypes in 2020, while also tooling the Shanghai plant for production of mid-size electric sports-utility vehicles.
鈥淲ithout the support of Chinese governments at all levels, especially Shanghai, we wouldn鈥檛 have been able to show this progress,鈥 said Musk. 鈥淭ogether, we have made history.鈥
Tesla鈥檚 success story is testament to Shanghai鈥檚 relentless pursuit of a better business environment and to China鈥檚 determination to accelerate the opening of its markets to foreigners.
Those were focus issue as Shanghai鈥檚 Party Committee and municipal officials held their first conference of 2020.
Party Secretary Li Qiang reiterated that Shanghai will make every effort to create a more internationally competitive environment for investment and development. He indicated that mission remains a priority for the government.
鈥淒epartments at all levels in Shanghai have undergone a fundamental change in the way they think and operate in the past few years,鈥 he said. 鈥淓fficiency of services has become ingrained in what they do.鈥
Among the goals on deck are the promotion of a one-stop online platform for government services, improvement of the city鈥檚 performance in the World Bank鈥檚 鈥淒oing Business鈥 assessment and implementation of policies protecting and stimulating the vitality of market entities.
Shanghai will take Hong Kong and Singapore as benchmarks in the development of its business model, learning from their ideas and experience in offering government services, said Ma Chunlei, the city government鈥檚 deputy secretary-general and director of the Development and Reform Commission.
Take the processing of construction permits as one example. Shanghai will try to emulate Hong Kong鈥檚 鈥渙ne-stop center鈥 mode, providing services that span the whole process of application, approval, inspection and acceptance checks through a single window.
To address problems faced by foreign companies, including cumbersome approval procedures and long waiting times for employee work permits, the city will create single-window services to cut down times to as little as seven working days.
鈥淚n addition to the World Bank鈥檚 rankings, we should attach no less importance to catering to the individual needs of companies,鈥 Secretary Li said.
The city鈥檚 goal to increase foreign investment appears to be paying off. Last year, 6,800 new foreign-investment projects were launched in the city, up 21.5 percent year on year. Contracted foreign investment rose about 7 percent to US$50.25 billion, while paid-in investment rose 10 percent to US$19.05 billion, according to the Shanghai Commission of Commerce.
Meanwhile, Tesla isn鈥檛 looking in the rear-view mirror. Musk said the company plans to open a 鈥渟uper cool鈥 design center in China to create an 鈥渙riginal car鈥 for sale in markets around the world.
鈥淯ltimately, the Model Y will have more demand than probably all of the other cars of Tesla combined,鈥 he said.
All these plans add up to increased investment in China, he said.
The company does face challenges, amid slowing auto sales and a crowded field of companies seeking to mass produce electric cars.
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