Tesla will start making cars at its upcoming factory in China faster than expected

  • Tesla said on Wednesday in its third-quarter earnings letter that it will accelerate its production timeline at its upcoming factory in Shanghai.
  • The automaker said it plans to begin parts of Model 3 production at the Shanghai factory in 2019, though it did not specify when in 2019 production would begin.
  • In July, Tesla said it expected construction for the factory to begin "in the near future" and projected it would take around two years after construction began before production started.
  • Tesla has said the Shanghai factory could produce around 500,000 vehicles starting about four to five years after construction begins.

Tesla said on Wednesday that it will accelerate its production timeline at its upcoming factory in Shanghai. The automaker said it plans to begin parts of Model 3 production at the Shanghai factory in 2019, though it did not specify when in 2019 production would begin. Tesla also said all vehicles in China will be available only to Chinese customers.

In July, Tesla said it expected construction for the factory to begin "in the near future" and projected it would take around two years after construction began before production started. Tesla has said the Shanghai factory could produce around 500,000 vehicles starting about four to five years after construction begins.

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Elon Musk, founder, CEO and lead designer at SpaceX and co-founder of Tesla, speaks at the International Space Station Research and Development Conference in Washington, U.S., July 19, 2017. REUTERS/Aaron P. Bernstein
Elon Musk, founder, CEO and lead designer at SpaceX and co-founder of Tesla, speaks at the International Space Station Research and Development Conference in Washington, U.S., July 19, 2017. REUTERS/Aaron P. Bernstein
Tesla Motors CEO Elon Musk takes the stage to speak at the National Governors Association Summer Meeting in Providence, Rhode Island, U.S., July 15, 2017. REUTERS/Brian Snyder
FILE PHOTO: Tesla Chief Executive, Elon Musk enters the lobby of Trump Tower in Manhattan, New York, U.S., January 6, 2017. REUTERS/Shannon Stapleton/File Photo
Elon Musk, Chairman of SolarCity and CEO of Tesla Motors, speaks at SolarCity's Inside Energy Summit in Manhattan, New York October 2, 2015. SolarCity on Friday said it had built a solar panel that is the most efficient in the industry at transforming sunlight into electricity. REUTERS/Rashid Umar Abbasi
Tesla Motors Inc CEO Elon Musk unveils a new all-wheel-drive version of the Model S car in Hawthorne, California October 9, 2014. Tesla Motors Inc on Thursday took its first step toward automated driving, unveiling features that will allow its electric sedan to park itself and sense dangerous situations. The company also said it will roll out an all-wheel drive option of the Model S sedan that can go from zero to 60 miles per hour in 3.2 seconds yet doesn't compromise the vehicle's efficiency. Musk said "D" stands for "dual motor," meaning Tesla's all-wheel drive vehicle will have a motor at either end of the chassis to increase control. REUTERS/Lucy Nicholson (UNITED STATES - Tags: TRANSPORT SCIENCE TECHNOLOGY BUSINESS HEADSHOT)
Tesla Motors Inc CEO Elon Musk unveils a new all-wheel-drive version of the Model S car in Hawthorne, California October 9, 2014. Tesla Motors Inc on Thursday took its first step toward automated driving, unveiling features that will allow its electric sedan to park itself and sense dangerous situations. The company also said it will roll out an all-wheel drive option of the Model S sedan that can go from zero to 60 miles per hour in 3.2 seconds yet doesn't compromise the vehicle's efficiency. Musk said "D" stands for "dual motor," meaning Tesla's all-wheel drive vehicle will have a motor at either end of the chassis to increase control. REUTERS/Lucy Nicholson (UNITED STATES - Tags: TRANSPORT SCIENCE TECHNOLOGY BUSINESS HEADSHOT)
Tesla Motors Inc Chief Executive Elon Musk speaks during a news conference in Tokyo September 8, 2014. Musk said on Monday that he would not be surprised if there was a significant deal with Toyota Motor Corp in the next two to three years, though there were no definitive plans. REUTERS/Toru Hanai (JAPAN - Tags: BUSINESS TRANSPORT)
Elon Musk, CEO of Tesla Motors, waves during a news conference to mark the company's delivery of the first batch of electric cars to Chinese customers in Beijing April 22, 2014. REUTERS/Stringer (CHINA - Tags: TRANSPORT BUSINESS) CHINA OUT. NO COMMERCIAL OR EDITORIAL SALES IN CHINA
CEO & CTO of SpaceX and CEO & Chief Product Architect of Tesla Motors Elon Musk receives The President's Award for Exploration and Technology at the 110th Explorers Club Annual Dinner at the Waldorf Astoria in New York March 15, 2014. The club, which promotes the scientific exploration of land, sea, air and space featured catering for the event by chef and exotic creator Gene Rurka. Chef Rurka prepared a variety of dishes featuring an array of insects, wildlife, animal body parts and invasive species. REUTERS/Andrew Kelly (UNITED STATES - Tags: SOCIETY BUSINESS SCIENCE TECHNOLOGY FOOD)
Tesla Motors CEO Elon Musk talks at the Automotive World News Congress at the Renaissance Center in Detroit, Michigan, January 13, 2015. REUTERS/Rebecca Cook (UNITED STATES - Tags: TRANSPORT BUSINESS)
SpaceX CEO Elon Musk speaks after unveiling the Dragon V2 spacecraft in Hawthorne, California May 29, 2014. Space Exploration Technologies, or SpaceX, on Thursday unveiled an upgraded passenger version of the Dragon cargo ship NASA buys for resupply runs to the International Space Station. REUTERS/Mario Anzuoni (UNITED STATES - Tags: POLITICS TRANSPORT SCIENCE TECHNOLOGY SOCIETY)
Tesla Motors CEO Elon Musk poses at the premiere of the documentary "Revenge of the Electric Car" in Los Angeles October 21, 2011. REUTERS/Mario Anzuoni (UNITED STATES - Tags: ENTERTAINMENT TRANSPORT BUSINESS PORTRAIT)
Elon Musk, Chief Executive of Tesla Motors and SpaceX, attends the Reuters Global Technology Summit in San Francisco June 18, 2013. REUTERS/Stephen Lam (UNITED STATES - Tags: BUSINESS SCIENCE TECHNOLOGY TRANSPORT)
Tesla Chief Executive Officer Elon Musk leaves a press event at his company's factory in Fremont, California, June 22, 2012. Tesla began delivering its Model S electric sedan to customers on June 22. REUTERS/Noah Berger (UNITED STATES - Tags: TRANSPORT SCIENCE TECHNOLOGY BUSINESS)
SpaceX founder Elon Musk pauses at a press conference following the first launch of a SpaceX Falcon Heavy rocket at the Kennedy Space Center in Cape Canaveral, Florida, U.S., February 6, 2018. REUTERS/Joe Skipper
SpaceX founder Elon Musk listens at a press conference following the first launch of a SpaceX Falcon Heavy rocket at the Kennedy Space Center in Cape Canaveral, Florida, U.S., February 6, 2018. REUTERS/Joe Skipper
Tesla Motors CEO Elon Musk waves as he leaves the stage after speaking at the National Governors Association Summer Meeting in Providence, Rhode Island, U.S., July 15, 2017. REUTERS/Brian Snyder
89th Academy Awards - Oscars Vanity Fair Party - Beverly Hills, California, U.S. - 26/02/17 ? Elon Musk. REUTERS/Danny Moloshok
Tesla Motors CEO Elon Musk speaks during the National Governors Association Summer Meeting in Providence, Rhode Island, U.S., July 15, 2017. REUTERS/Brian Snyder
Elon Musk, founder, CEO and lead designer at SpaceX and co-founder of Tesla, arrives at the SpaceX Hyperloop Pod Competition II in Hawthorne, California, U.S., August 27, 2017. REUTERS/Mike Blake
Tesla Chief Executive Elon Musk attends a forum on startups in Hong Kong, China January 26, 2016. REUTERS/Bobby Yip
Tesla CEO Elon Musk speaks about new Autopilot features during a Tesla event in Palo Alto, California October 14, 2015. REUTERS/Beck Diefenbach
Tesla founder Elon Musk arrives for the the annual Allen and Co. media conference Sun Valley, Idaho July 7, 2015. REUTERS/Mike Blake
AUSTIN, TX - MARCH 11: Elon Musk speaks onstage at Elon Musk Answers Your Questions! during SXSW at ACL Live on March 11, 2018 in Austin, Texas. (Photo by Chris Saucedo/Getty Images for SXSW)
AUSTIN, TX - MARCH 11: Elon Musk speaks onstage at Elon Musk Answers Your Questions! during SXSW at ACL Live on March 11, 2018 in Austin, Texas. (Photo by Diego Donamaria/Getty Images for SXSW)
AUSTIN, TEXAS - MARCH 10: Elon Musk speaks on stage during the Westworld Featured Session during SXSW at Austin Convention Center on March 10, 2018 in Austin, Texas. (Photo by FilmMagic/FilmMagic for HBO)
AUSTIN, TX - MARCH 10: Elon Musk, CEO of SpaceX speaks onstage during SXSW at Austin Convention Center on March 10, 2018 in Austin, Texas. (Photo by Amy E. Price/Getty Images for SXSW)
BERLIN, GERMANY - NOVEMBER 08: Elon Musk attends the 'Goldenes Lenkrad' Award at Axel Springer Haus on November 8, 2016 in Berlin, Germany. (Photo by Tristar Media/WireImage)
Tesla Motors CEO Elon Musk speaks at a press conference during the 67th International Astronautical Congress in Guadalajara, Mexico on September 27, 2016. / AFP / HECTOR GUERRERO (Photo credit should read HECTOR GUERRERO/AFP/Getty Images)
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Reuters reported on Wednesday that Tesla will make its upcoming Model Y SUV, which Tesla CEO Elon Musk has said will begin production in 2020, at the Shanghai factory, citing a Shanghai government filing.

Vehicle production has been a major point of focus for Tesla since it introduced the Model 3 sedan in July 2017. Musk acknowledged in April that the automaker had attempted to automate too many production tasks at its factory in Fremont, California, where it makes the Model S, Model X, and Model 3, and would use more human workers in the assembly process.

Tesla initially struggled to hit its production targets for the Model 3 due in part to excessive automation at the Fremont factory. In May 2016, Musk estimated the company would make 100,000 to 200,000 Model 3s during the second half of 2017, though Tesla made just 2,685 Model 3 vehicles in 2017. 

At the end of June, Tesla hit its long-delayed goal of making 5,000 Model 3 vehicles in one week and, at the beginning of this month, Tesla said it produced 80,142 vehicles during the third quarter, which was the highest quarterly production rate in the automaker's history and 50% higher than its previous high, achieved in the second quarter of this year.

The automaker postedadjusted earnings of $2.90 per share (compared to an analyst forecast of -$0.15 per share) on $6.8 billion in revenue (compared to an analyst forecast of $6.315 billion) during the third quarter.

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SEE ALSO: A government filing may have revealed where Tesla will build the Model Y

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