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WATCH: Tesla launches Model Y program at Shanghai factory

WATCH: Tesla launches Model Y program at Shanghai factory

On Tuesday, Tesla CEO Elon Musk addressed several government officials as the American Automotive company launched its new Model Y electric sports utility vehicle program in its new Shanghai factory. 

Tesla’s latest ambitious project is the company’s first entry in the compact luxury SUV segment. The launch comes just one year after the company broke ground on its first overseas plant. 

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Tesla unveiled the Model Y in March 2019 and stated that production of the electric compact SUV will be running ahead of schedule, adding that it expects the model to launch by summer 2020. 

However, Tesla stated that margin expectations are much higher for the Model Y than Model 3 despite production costs costing more or less the same. Tesla’s China website estimates the starting price for Model Y vehicles at 444,000 yuan ($63,912), whereas the China-made Model 3 sedans are priced at 355,800 yuan before subsidies.

Shanghai Vice Mayor Wu Qing stated that he hopes to see Tesla extend its cooperation with the city and for the carmaker to manufacture more models at the Chinese plant.

The $2 billion Tesla Inc. factory started delivering cars in just 357 days setting a record for global automakers in China produced, with the first batch of China produced Model 3 sedans being given to the first 10 customers of the public on Tuesday.

While discussing the progress of the Shanghai factory, Musk predicted that “ultimately Tesla Model Y will have more demand than probably all the other cars of Tesla combined.” The launch was attended by the Mayor of Shanghai, Ying Yong as well as other senior government officials. 

The construction of the Tesla plant began in January 2019 with production starting in October. Production capacity was set at 150 000 Model 3 sedans with Tesla aiming to push the amount to 250 000 vehicles a year. However, Tesla executives are not able to provide further details on the progress of the China-made Model Y project.

With Tesla’s shares increasing at 10% since the beginning of the year, trading close to their record high, positive news from the Shanghai factory has also sparked a rally in shares of Tesla Chinese suppliers.