A customer is going for a test drive in Tesla’s Xintiandi showroom in Shanghai, on March 11, 2019. (Image credit: TechNode / Yu Dingzhang)

Tesla has started giving media test drives for its first made-in-China Model 3 at its brand-new Shanghai Gigafactory 3, Electrek reported, a mere nine months after breaking ground on the site.

Why it matters: The speed with which Tesla began producing vehicles in its Shanghai Gigafactory 3 signals dedication from Shanghai’s municipal government, which aggressively wooed the company last year. 

  • Tesla is being held up as a key driver in China’s electric vehicle industry, which has slowed considerably following a drastic drop in government subsidies over the summer, and along with a broader auto sales slowdown in the country.    

Details: The news follows a Weibo post by the company last week teasing the car.  

  • The automaker has yet to receive a manufacturing certification from the government but expects to get it by the end of the year, according to Chairman Robyn Denholm. 
  • Nevertheless, in its Q3 earnings report in October, Tesla said the Model 3s currently being manufactured are still part of its trial production. 
  • Tesla also said in the earnings report that the trail production had begun ahead of schedule. 

Tesla kicks off trial production in Shanghai, surprises with Q3 profits

Context: The Shanghai Gigafactory is China’s first EV production facility wholly owned by a foreign automaker. 

  • Elon Musk has said that the Shanghai factory will produce at least 1,000 cars per week by the end of the year, and eventually a weekly rate of 3,000 vehicles. 
  • China’s EV market has become increasingly crowded, with 486 manufacturers registered in the country earlier this year, according to the Los Angeles Times—three times more than two years ago. 
  • EV demand in China has slowed for the past four months, with aggregate sales of battery-electric vehicles and plug-in hybrids decreasing 46%.
  • Tesla’s Model 3 made-in-China test drives come on the same day Volkswagen Group and SAIC Motors announced that trial production has started at their EV factory in Shanghai. 

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